WORLD TRADE  
ORGANIZATION  G/SCM/N/155/EEC 
21 November 2007 
 (07-5124) 
Committee on Subsidies and 
Countervailing Measures Original:   English 
 
 
 
SUBSIDIES 
 
New and Full Notification Pursuant to Article XVI:1  
of the GATT 1994 and Article 25 of the Agreement  
on Subsidies and Countervailing Measures  
  
EUROPEAN COMMUNITIES 
 
 
 The following communication, dated 13 July 2007, is being circulated at the request of the Delegation of the European Commission.    
_______________ 
  G/SCM/N/155/EEC 
Page 2  
 
  EUROPEAN COMMUNITIES  
 
TABLE OF CONTENTS  
 
 
Page   
I. INTRODUCTION ................................................................................................................... .5 
A. STRUCTURE OF NOTIFICATION ....................................................................................................5  
B. PERIOD COVERED ........................................................................................................................5  
C. PRESENTATION OF NOTIFICATION ...............................................................................................5  
D. STATUS OF SUBSIDIES .................................................................................................................5  
II. EUROPEAN COMMUNIT Y SUBSIDIES.............................................................................5  
III. THE EUROPEAN COMMUNITY'S STRUCTURAL ACTIONS ......................................6  
INTRODUCTION ............................................................................................................................... ........6  
A. EUROPEAN REGIONAL DEVELOPMENT FUND .............................................................................7  
B. EUROPEAN SOCIAL FUND ...........................................................................................................8  
C. EUROPEAN AGRICULTURAL GUARANTEE AND GUIDANCE FUND (EAGGF)  – 
GUIDANCE SECTION ....................................................................................................................9  
D. EUROPEAN AGRICULTURAL GUARANTEE AND GUIDANCE FUND (EAGGF)  – 
GUARANTEE SECTION ...............................................................................................................10  
IV. COMMON AGRICULTURE POLICY -ACCOMPANYING MEASURES.....................11  
A. EUROPEAN AGRICULTURAL GUARANTEE AND GUIDANCE FUND (EAGGF)  – 
GUARANTEE SECTION ...............................................................................................................11  
V. AGRICULTURE .................................................................................................................... 12 
A. GENERAL REMARKS ..................................................................................................................12  
B. MEASURES ............................................................................................................................... .13 
1. Export Refunds ................................................................................................................. ......13  
2. Direct Aids and Interventions in agricultural markets .......................................................13  
C. DIRECT AIDS.............................................................................................................................14  
1. Cross Comp liance ............................................................................................................... ....14  
2. Single Payment Scheme (SPS;  see also Annex 1) ................................................................15  
3. Single Area Payment Scheme (SAPS;  see also Annex 1)....................................................16  
4. Coupled Direct Payments (see also Annex 1) .......................................................................17  
D. INTERVENTIONS IN AGRICULTURAL MARKETS PER SECTOR .....................................................20  
1. Arable Crops ................................................................................................................... ........20  
2. Rice........................................................................................................................... ................21  
3. Dairy Products ................................................................................................................. .......21  
4. Olive Oil ...................................................................................................................... .............23   G/SCM/N/155/EEC 
 Page 3 
 
 
  5. Sugar .......................................................................................................................... ..............23  
6. Bovine Meat.................................................................................................................... .........24  
7. Pigmeat ........................................................................................................................ ............24  
8. Sheepmeat and Goatmeat.......................................................................................................25  
9. Fruits and Vegetables .......................................................................................................... ...25 
10. Bananas........................................................................................................................ ............26  
11. Processed Fruits and Vegetables ...........................................................................................27  
12. Wine ........................................................................................................................... ..............29  
13. Tobacco........................................................................................................................ ............32  
14. Textile Fibres................................................................................................................. ..........33  
15. Dried Fodder ................................................................................................................... ........34  
16. Seeds.......................................................................................................................... ...............35  
17. Hops........................................................................................................................... ...............35  
E. PROMOTION OF AGRICULTURAL PRODUCTS IN EU AND THIRD COUNTRIES ............................35  
VI. INDUSTRY....................................................................................................................... .......36  
A. COMMUNITY FRAMEWORK PROGRAMMES IN THE FIELD OF RESEARCH ...................................36  
B. RESEARCH ON COAL AND STEEL ...............................................................................................37  
C. AID TO THE COAL INDUSTRY .....................................................................................................39  
1. Council Regulation 1407/2002 of 23 July 20 02 on State aid to the coal industry..............39  
VII. OTHER PROGRAMMES .....................................................................................................41  
A. SME  AND ENTREPRENEURSHIP PROGRAMME ...........................................................................41  
B. JEV  PROGRAMME .....................................................................................................................42  
C. FIFG........................................................................................................................... ...............44  
D. COMMON ORGANISATION OF MARKETS IN FISHERY AND AQUACULTURE PRODUCTS ............45  
 G/SCM/N/155/EEC 
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Irrevocable EURO Conversion Rates 
(Council Regulation (EC) No 2866/98 of 31.12.1998 
amended by (EC) No 1478/2000 of 19.6.2000) 
    
 
1 EURO   = 40.3399 BEF (BELGIUM FRANCS) 
 
   =  1.95583 DEM (GERMAN MARKS) 
 
     =  340.750 GRD (GREEK DRACHMAS) 
      =  166.386 ESP (SPANISH PESETAS) 
 
     =  6.55957 FRF (FRENCH FRANCS) 
 
     =  0.787564 IEP (IRISH POUNDS) 
 
     =  1936.27 ITL (ITALIAN LIRAS) 
 
     =  40.3399 LUF (LUXEMBURG FRANCS) 
 
     =  2.20371 NLG (DUTCH GUILDERS) 
 
     =  13.7603 ATS (AUSTRIAN SHILLINGS) 
 
     =  200.482 PTE (PORTUGUESE ESCUDOS) 
 
     =  5.94573 FIM (FINNISH MARKS) 
  G/SCM/N/155/EEC 
 Page 5 
 
 
  I. INTRODUCTION 
A. STRUCTURE OF NOTIFICATION  
 Subsidies in the European Community are gran ted both at Community level i.e. out of the 
Community budget, and by Member States.    
 In view of this, the notification is divided into  two parts.  This first part of the notification 
deals with subsidies granted by the European Community and general information on aid granted 
within the Community's territory.  The second part of this notification, circulated as addenda to this 
notification, covers subsidies granted by individual Member States.  The Member States' notifications 
cover subsidies granted at both na tional and sub-national level.   
 
B. P
ERIOD COVERED  
As far as possible, this notification rela tes to subsidies granted during the period 2003 
and 2004 and to subsidy programmes which are currently in  force, and provides statistical information 
at least up to the end of 2004 .   
 
C. PRESENTATION OF NOTIFICATION  
The information provided in this notification in cludes, as far as possible, all the elements 
required by Article 25.3 of the Subsidies Agreem ent and in almost all cases follows the presentation 
required by the subsidies questionnaire.  In a few ca ses, the presentation is different to that specified 
in the questionnaire, but all the requi red elements are still included.   
 
D. STATUS OF SUBSIDIES  
In preparing this notification, the Commun ity has attempted to achieve the maximum 
transparency with regard to aid and support measures granted within its territory.  The fact that such 
aid has been notified does not, in accordance with Article 25.7 of th e Subsidies Agreement, prejudge 
its legal status under GATT 1994 or this Agreem ent, nor does it prejudge its effects under the 
Agreement or the nature of the measure itself.  In view of the diverse nature of many of the programmes notified, it may be that only part of a programme's funding involves a subsidy element, 
which may or may not be specific.  Consequently, th e appearance of a programme in this notification 
does not in any way imply that the whole or part of its expenditure amounts to a specific subsidy.    II. EUROPEAN COMMUNITY SUBSIDIES 
(a) Subsidies granted out of the European Community budget
 
 In 2003, total  expenditure by the European Community amounted to € 102 billion .   
  In 2004, total  expenditure by the European Community amounted to € 111 billion .   
 
 The two largest areas of expenditure were agriculture and structural operations, which 
accounted for 44 per cent and 33 per cent of financia l commitments respectively.  Another notable 
area of expenditure is research, which took up 4 per cent of total expenditure.  All these are described 
in more detail in this part of the notification.    
(b) State aid in the Member States
 
  The European Commission is responsible fo r examining all state aid granted within the 
Community in order to determine its conformity w ith Article 92 of the EC Treaty, (and Article 95 of G/SCM/N/155/EEC 
Page 6  
 
  the ECSC Treaty, for coal and steel products), Member States are required to notify all aid schemes to 
the Commission, which may decide either not to  raise any objection or open an investigation 
procedure.  If the aid scheme is ultimately found not to conform to Article 92, the Commission issues 
a negative decision which prevents the aid being gr anted.  If the Member State has already granted 
such aid, the Commission can order the aid to be repaid.   
 
 Details of Member States' aid schemes can be found in addenda to this notification.   
 
III. THE EUROPEAN COMMUNITY'S STRUCTURAL ACTIONS 
I
NTRODUCTION  
1. The Community's structural actions (comprising the Structural Funds and the Cohesion Fund) 
are intended to strengthen the economic and social  cohesion of the Community, in particular by 
reducing disparities between the leve ls of development of the vari ous regions and the backwardness 
of the least-favoured regions.  Revised Regulations  concerning the Structural Funds were adopted on 
21 June 1999, and cover the period 2000-2006 .  The commitments in 2003 amounted to 
EUR 31,1 Billion, in 2004 to EUR 35,2 Bio.  Following the enlargement of the EU on 1 May 2004, 
the commitment for the ten new EU Member  States amounted to EUR 3,8 billion.   
2. The three main Structural Funds (European Regional Development Fund (ERDF), European 
Social Fund (ESF), European Agricultural Gu idance and Guarantee Fund, Guidance Section 
(EAGGF) are described in detail below.  In addition,  the funds include the Financial Instrument for 
Fisheries Guidance (FIFG), which assists in the restru cturing of the fisheries sector with an annual 
budget of EUR 578 Mio in 2003 and EUR 629 in 2004.   
 The other component of EU structural spendi ng is the Cohesion Fund, which is intended to 
contribute to projects in the fields of environment and transport infrastructure, with an annual budget 
of around € 2,7 billion (€ 18 billio n for the 2000-2006 period).  Eligibility is reserved for Member 
States whose GDP per capita is less than 90 per cent of the EU average (currently Greece, Portugal, 
Spain, plus the ten new Member States as from their accession on 1 March 2004:  Estonia, Latvia, 
Lithuania, Poland, Czech Republic, Slovakia, Hungary, Slovenia, Malta and Cyprus).   
 3. The Structural Funds (ERDF, ESF, EAGGF and FIFG) are devoted to the following 
objectives, all of which are cofinanced by Member States:   
 Objective 1: Development and structural adju stment of the regions whose development is 
lagging behind (GDP of less than 75 per cent of the EU average).   
 Objective 2: Economic and social conversion of areas facing structural difficulties.    Objective 3: The adaptation and the modernisation of national policies and systems of 
education, training and employment. It is entirely financed by the ESF.   
 
 In addition, € 1,5 billion per annum is set asi de for Community initiatives in the fields of 
deprived urban areas, interregional co-operation,  rural development and equal opportunities.   
 4. These structural actions are required to confor m strictly to the Community's rules on the 
provision of state aid (Article 87 of the EU Treaty).   
5. The structural actions are notified in a spirit of transparency.  The aid involved is largely 
devoted to the least-developed areas of the EU, and the great majority of it goes to finance 
infrastructure or to assist individuals directly, without necessarily benefiting commercial enterprises.  
Consequently, as stated at the beginning of this doc ument, the notification of a particular fund does 
not prejudge the status of the aid involved.  In addition, only a relatively small part of the Structural Funds are used to assist private investment.    G/SCM/N/155/EEC 
 Page 7 
 
 
  A. EUROPEAN REGIONAL DEVELOPMENT FUND 
1. Title of the programme  
  European Regional Development Fund (ERDF).    
2. Period covered by the notification
 
  2003, 2004.    3. Policy objective and/or purpose of the programme
 
 
 The ERDF is intended to help redress the main regional imbalances in the Community 
through participation in the development and struct ural adjustment of regions whose development is 
lagging behind (Objective 1) and in the economic a nd social conversion of areas facing structural 
difficulties (Objective 2).   
 
4. Background and authority for the programme  
  Articles 158 and 160 of the EU Treaty:  Council Regulation (EC) Nos. 1260/1999 and 1783/1999.    
5. Form of assistance granted – Grants from Community budget for
 
  ERDF resources are mainly used to cofinance:    
• productive investment leading to the creation or maintenance of jobs;   
• infrastructure;   
• local development initiatives and the busin ess activities of small and medium-sized 
enterprises.   
 
6. To whom and how the assistance is provided
 
  ERDF aid is cofinanced by the Member States;  the ERDF provides a minimum of 25 per cent of the total public expenditure involved, except in Objective 1 regions, where a minimum of 50 per 
cent applies.   
  Member States submit multi-annual operation programmes, covering a coherent set of 
regional development measures, and are responsible for the implemen tation of the programme and the 
selection of individual projects.    
 As regards productive investment, the ERDF par ticipates in financing (national) investment 
aid with a regional aim.  The aid is governed by the principles of coordination adopted by the Commission within the context of its competition policy and which, inter alia , set aid ceilings on 
investments in firms.  This ceiling has been reduc ed in the current period to 15 per cent of total 
eligible costs, except in Objective 1 re gions where the rate is 35 per cent.   
 
 Aid is normally in the form of grants or loans.    7. Total expenditure under the programme
 
  The ERDF has historically tended to account for more than half of the total for the 
three Funds, its expenditure amounted in 2003 to EUR 13,4 Billion and in 2004 to EUR 16,8 Billion.   G/SCM/N/155/EEC 
Page 8  
 
  8. Duration of the programme
 
  2000-2006.    9. Trade effects
 
 
 Because the Fund is designed to alleviate di sparities between regions within the Community, 
and because the aid is paid out on a horizontal basis, within eligible regions, it is considered that the 
trade effects are minimal.    
B. E
UROPEAN SOCIAL FUND 
1. Title of the programme  
 European Social Fund (ESF).   2. Period covered by the notification
 
 2003, 2004.   
3. Policy objective and/or purpose of the programme  
 The European Social Fund was set up by the EEC Treaty in 1957 to improve the employment 
opportunities for workers and to help raise their livi ng standards.  It is based on Articles 146-148, 
158-162 of the EEC treaty, according to which its main  tasks are to render the employment of workers 
easier by improving their geographical and occupatio nal mobility and to increase economic and social 
cohesion within the Community.  It is provided on a general basis under objective 3, and within the 
other two regional objectives.   
 4. Background and authority for the programme
 
 Above Articles of the EC Treaty:  Counc il Regulations (EC) No. 1260/1999 as well as 
Parliament and Council Regulations (E C) Nos. 1783/1999 and 1784/1999.5.   
 
5. Form of assistance granted – Grants from Community budget for  
 - Vocational training, 
 - Employment aids and aids for self-employment,  - Development of new sources of employment.    
6. To whom and how the assistance is provided
 
 The ESF provides co-financed support in Member States for vocational training, aids for 
employment and innovative actions.  The aid is nor mally devoted to people, not to enterprises.   
  Operational programmes, once approved by the Commission, are managed by the competent 
authorities in the Member States.  Identification of individual projects is the responsibility of the 
Member State.     Aid is normally in the form of grants or loans.    7. Total expenditure under the programme
 
 EUR 6,5 Billion for 2003 and EUR 7,6 Billion for 2004.    G/SCM/N/155/EEC 
 Page 9 
 
 
  8. Duration of the programme  
 2000-2006.   9. Trade effects
 
  Since aid is granted for the benefit of indivi duals, not enterprises, in order to promote active 
labour market policies and social cohesion, the ESF is  not considered to have  any appreciable impact 
on trade.   C. E
UROPEAN AGRICULTURAL GUARANTEE AND GUIDANCE FUND (EAGGF)  – GUIDANCE 
SECTION  
1. Title of the programme  
  European Agriculture and Guidance Fund (EAGGF)-Guidance section (Eur25).   
 Sapard programmes Eur8, (10 NMS except MT and CY).    RDP financed by the Rural Developm ent Financial Instrument Eur10.   
 
2. Period covered by the notification
 
  1 January 2005 - 31 December 2006.    3. Policy objective and/or purpose of the programme
 
 
 Promoting rural development and structural adjustments in regions whose development is 
lagging behind, including underdeveloped agricu ltural regions, (Objective 1).  Speeding up the 
adjustment of agriculture structures in the frame work of the reform of the Common Agriculture 
Policy (Objective 1, Sapard and RDFI-Eur10).   
 
4. Background and authority for the programme  
  Council Regulations (EEC) Nos. 1260/99 1257/ 99, and 1268/99.  The Guidance section was 
established in 1972.    
5. Form of assistance granted – Grants from Community budget for
 
  Rural development programmes co-financed by MS and the Commission.    6. To whom and how the assistance is provided
 
 
 Aid is co-financed with the Member St ates and implemented through multi-annual 
programmes based on the aims of the EAGGF Guid ance section as indicated above.  The Member 
States are responsible for the implementation of  the programme and the selection of individual 
projects.    
 Aid is normally in the form of grants or loans.   
 7. Total expenditure under the programme
 
  The table below shows the amounts involved (payment appropriations in bn € for each 
financial instrument).   G/SCM/N/155/EEC 
Page 10  
 
   
Financial 
instrument 2005 2006 Total 
EAGGF-Guidance 3.097 3.560 6.657 
Sapard  0.557 0.008 0.565 
RDFI-Eur10 1.415 2.116 3.531 
Total 5,069 5,684 10,753 
 
8. Duration of the programme  
 
 2000-2006 for EUR15 and 2004-2006 for EUR10.   
 9. Trade effects
 
  Given the aims of the programme it is consid ered that the trade effects are minimal.   
 
D. E
UROPEAN AGRICULTURAL GUARANTEE AND GUIDANCE FUND (EAGGF)  – GUARANTEE 
SECTION  
1. Title of the programme  
  Rural Development plans. European Ag riculture and Guidance Fund (EAGGF)-Guarantee 
section.   
 2. Period covered by the notification
 
  1 January 2005 - 31 December 2006.   
 
3. Policy objective and/or purpose of the programme
 
  Promoting rural development and structural  adjustments outside Objective 1 regions.  
Speeding up the adjustment of agriculture structures in the framework of the reform of the Common 
Agriculture Policy.   
 
4. Background and authority for the programme
 
  Council Regulation (EEC) No 1257/99.    
5. Form of assistance granted – Grants from Community budget for
 
  Agricultural development measures and adjustment of agricultural structures outside Objective 1 regions.    
6. To whom and how the assistance is provided
 
  Aid is co-financed with the Member Stat es and implemented trough multi-annual operation 
programmes based on the aims of the EAGGF Guar antee section as indicated above.  The Member 
States are responsible for the implementation of  the programme and the selection of individual 
projects.   
 
 Aid is normally in the form of grants or loans.    G/SCM/N/155/EEC 
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  7. Total expenditure under the programme  
  EUR 1,24 billion was budgeted for 2005 (EU- 25) and EUR 1,65 billion for 2006 (EU-25).   
 8. Duration of the programme
 
 
 2000-2006.    9. Trade effects
 
 
 Given the aims of the programme it is consid ered that the trade effects are minimal.   
 
IV. COMMON AGRICULTURE POLICY-ACCOMPANYING MEASURES 
A. EUROPEAN AGRICULTURAL GUARANTEE AND GUIDANCE FUND (EAGGF)  – GUARANTEE 
SECTION  
1. Title of the programme  
 
Accompanying Measures of the Rural Developm ent Programs. European Agriculture and 
Guidance Fund (EAGGF)-Guarantee section.    2. Period covered by the notification
 
 
1 January 2004 - 31 December 2005.   
 3. Policy objective and/or purpose of the programme
 
 
To support the following measures throughout the whole EU:   
 
(a)  Early retirement.   
 
(b)  Agro-environmental  measures.   
 
(c)  Afforestation of agricultural land.   
 
(d)  Compensatory allowances for less-favoured areas.   
 4. Background and authority for the programme
 
 
Council Regulations (EEC) No1257/99.   
 5. Form of assistance granted – Grants from Community budget for
 
 
(a) Early retirement for abandoni ng agricultural activity.   
 
(b) Grants to compensate per income fore gone and additional costs resulting from agri-
environment commitments.   
 
(c) Grants for planting trees on agriculture land.   
 
(d) Area payments to compensate less productiv ity in agriculture due to climatic or 
geographic limitations.   
 G/SCM/N/155/EEC 
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  6. To whom and how the assistance is provided
 
 
Aid is co-financed with the Member St ates on the basis of multi-annual operation 
programmes based on the aims of the EAGGF Guar antee section as indicated above.  The Member 
States are responsible for the implementation of  the programme and the selection of individual 
projects.   
 
Aid is normally in the form of grants or loans.   
 7. Total expenditure under the programme
 
 
EUR 3,68 billion was budgeted for 2005 (EU-25)  and EUR 3.97 billion for 2006 (EU-25).   
 8. Duration of the programme
 
 
2000 - 2006.   
 9. Trade effects
 
 
Given the aims of the programme it is consider ed that the trade effects are minimal.   
 V. AGRICULTURE 
A. G
ENERAL REMARKS  
1. During 2003, 2004 and 2005, the Common Agri cultural Poilicy was profoundly reformed by 
the introduction of a new system of Single Farm Payments (income support) in which the link between support and production was cut (decoupling).  The newly created Single Payment Scheme  
(SPS) is the successor of most of the direct aid paymen ts to farmers previously offered.  Nevertheless, 
in the 2003 Reform, some of the animal premiums and arable aid payments were - at the choice of Member States - maintained.  This  means that next to the decoup led payments a number of coupled 
payments were maintained.    2. The main provisions of the Act of Accessi on regarding the direct payments in the new 
Member States have been integrated in Council Regulation (EC) No 1782/2003, the "CAP Reform" 
Council Regulation (see Council Decision of 22 Ma rch 2004 adapting the Act of Accession following 
the reform of the common agricultural policy, OJ  L 93 of 30 March 2004).  In essence, the accession 
negotiations resulted in three specific sets of pr ovisions regarding the implementation of direct 
payments in the new Member States:   
 
- the progressive introduction (phasing in) of direct payments, from 2004 to 2013 (from 2007 
to 2016 in Bulgaria and Romania), 
 
- the possibility to opt for an easier to manage  transitional regime, the Single Area Payment 
Scheme (SAPS) with the possibility to gr ant additional support to farmers, using 
Complementary National Direct Payments  (CNDPs, or so called "top-ups").   
 3. In 2005 and 2006, agricultural support still included interventions in agricultural markets.    4. With respect to the total amount of aid, it shoul d be noted that the data in this section of the 
notification relate to payments made by th e European Agricultural Guidance and Guarantee 
Fund (EAGGF) in the course of the budget years 2004, 2005 and 2006.    G/SCM/N/155/EEC 
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  B. MEASURES  
1. Export Refunds 
For certain of the sectors governed by a common market organisation, the Common 
Agricultural Policy provides for the possibility of granting export refunds.    
The purpose of export refunds is to cover the difference between Community prices and 
international trade prices in order to enable exports to be effected at international trade prices.   
 
The refund is the same for the whole of the Community; a differential may be applied 
according to destination or time (months of delivery) .  The amount of the refund is fixed periodically 
by the Commission.  The periodicity of the fixing is  different for each sector because of the special 
characteristics of each sector.  In order to facilitate  export operations, in the case of the majority of 
products a system has been introduced whereby refunds  can be fixed in advance.  The refund is paid 
to the exporter.    
The total amount of export refunds financed  by the EAGGF in 2004, 2005and 2006 are as 
follows:    
(EAGGF budget – EUR million) 
 
Products 2004 2005  2006 
Cereals 72,4 124,3  127,7 
Sugar 988,3 1.080,6  1.116,9 
Rice 22,4 6,7  1,0 
Olive Oil 0,0 -0,1  0,0 
Fruits and vegetabl es 25,8 25,3  26,4 
Wine 13,1 17,3  19,2 
Dairy products 1.494,9 1.140,8  724,9 
Bovine meat 250,8 212,0  118,4 
Pigmeat 42,2 19,1  19,5 
Eggs and poultry 88,5 87,1  61,2 
Non Annex I Products 380,3 335,4  274,1 
Programmes Alimentaires 5,6 3,4  4,4 
Total expenditure 3.384,2 3.051,9  2.493,6 
 
 
2. Direct Aids and Interventions in agricultural markets 
 In order to stabilise markets a nd assure the agricultural population of an equitable standard of 
living, the Common Agricultural Policy provides, in the market organisation regulations for the different products, intervention and aid measures that vary according to  the nature of the product and 
the special characteristics of the market.   
  The financial basis for SPS implementation is the establishment in the CAP reform agreement 
of a maximum amount that each state could spend on direct aids – known as the national ceiling , 
based on the total of direct aids (and equivalent pa yments) paid in a historic reference period in each 
Member State.  National ceilings accumulate all those aid payments and provide the total amount 
available for SPS.  All direct payments, coupled or not are reduced (the " modulation " mechanism), 
by 3 per cent in 2005, 4 per cent in 2006 and 5 per cent from 2007 onwards, in order to finance 
additional rural development measures.  Direct payments under EUR 5 000 pe r farm will not be 
reduced.  Certain Member States have the option to  apply an additional Voluntary Modulation with a G/SCM/N/155/EEC 
Page 14  
 
  rate up to 20 per cent.  A " financial discipline " mechanism provides for further reductions in 
payments when overall ceilings on CAP expend iture are in danger of being breached.   
  The cost of these intervention and aid measures  as well as direct aids are, as a general rule, 
financed by the EAGGF.  During the years 2004, 2005 and 2006 they have amounted to: 
 
(EAGGF budget year – EUR million) 
 
2004  2005  2006 
Products / 
Measures Couple 
Direct 
Aids Market 
measures 
& Storage  Coupled 
Direct 
Aids Decoupled 
Direct Aids Market 
measures 
& Storage  Couple 
Direct 
Aids Decoupled 
Direct Aids Market 
measures 
& Storage 
Single Payment 
Scheme (1) - -  - - -  - 14.542,0 - 
Single Area 
Payment 
Scheme  - -  - 1.449,2 -  - 1.721,3 - 
Arable crops 17.122,7 101,5  17.145,9 - 499,6  8.174,4 - 435,1 
Sugar 0,0 295,1  0,0 - 571,2  0,0 - 403,8 
Rice 110,1 47,5  427,2 - 2,4  261,4 - -3,2 
Olive Oil 2.301,5 70,8  2.227,1 - 84,3  2.312,0 - 29,5 
Flax and hemp 0,0 17,9  0,0 - 20,0  0,0 - 20,5 
Cotton 0,0 835,3  0,0 - 952,0  0,0 - 914,6 
Silkworms 0,3 0,0  0,4 - 0,0  0,5 - 0,0 
Fruits and 
vegetables 344,0 1.203,1  374,6 - 1.342,8  284,8 - 1.345,3 
Wine 0,0 1.078,9  0,0 - 1.249,9  0,0 - 1.467,8 
Tobacco 923,9 5,3  905, 4 - 17,3  811,0 - 17,5 
Seeds 107,5 0,0  108,8 - 0,0  45,5 - 0,0 
Hops 10,6 1,9  12,6 - 0,0  3,1 - 0,0 
Dairy products 0,0 498,5  1.369,6 - 37,1  1.453,8 - 284,7 
Bovine meat 7.311,7 213,6  7.730,5 - 233,6  3.297,8 - 134,5 
Sheepmeat ant 
goatmeat  1.475,5 -2,0  1.837,3 - 0,0  950,4 - 0,0 
Pigmeat, eggs 
and poultry 0,0 42,5  0,0 - 25,3  0,0 - 20,4 
Fishery 
products 0,0 23,8  0,0 - 28,5  0,0 - 25,8 
POSEI 47,4 169,3  37,3 - 148,0  81,3 - 137,8 
Other products 
/ measures (2) 73,5 306,1  75,0 - 133,0  112,0 - 101,4 
Other products 
/ measures (3) 0,0 180,5  0,0 - 3,2  0,0 - 294,8 
Total 
expenditure 29.824,7 5.089,6  32.251,7 1.449,2 5.348,2  17.788,0 16.263,3 5.630,3 
 
(1) Additional amounts of aid included.   
(2) Dried fodder, grain legumes and recoveries.   
(3) Free distribution of food, promotion, veterina ry measures, clearance of accounts, etc.   
 
C. DIRECT AIDS 
1. Cross Compliance 
 All farmers claiming direct payments, whether or not they actually produce from their land, 
must abide by the condition of Cross compliance,  i.e. the respect of standards to be established by the 
Member States for keeping land in good agricultural and environmental condition .  Farmers must 
also respect Cross compliance standards called statutory management requirements  set-up in 
accordance with 19 EU Directives and Regulations re lating to the protection of environment, public 
animal and plant health, as well as animal welfare.  Failure by farmers to respect these conditions can 
result in deductions from, or complete cancellation of, direct payments.  Cross compliance applies to 
all direct aid payments, even when they are not yet part of the SPS.  Member States applying the  G/SCM/N/155/EEC 
 Page 15 
 
 
  SAPS may provisionally not include the statutory ma nagement requirements into the scope of cross 
compliance.  The main objectives of the cross compliance system include improving sustainability of 
European agriculture and rural areas, making CAP comp atible with the expectations and concerns of 
society as well as strengthening the CAP's legitimacy and public acceptance.  Amounts of direct 
payments resulting from such penalties revert to  the EU (though Member States may retain up to 
25 per cent of amounts deducted).    
  The following direct payment schemes are c overed by the cross compliance system i.e. 
payments under these schemes could be reduced of cancelled in case of non compliance with the 
concerned rules:
1   
 
 (a) A newly created income support scheme for farmers ( Single Payment Scheme or 
SPS – see C.2 below );   
 (b) A newly created scheme of simplified s upport for farmers in the New Member States 
(Single Area Payment Scheme or SAPS  - see C.3 below );    
 (c) Coupled direct support  schemes for farmers producing arable crops, protein crops, 
rice, milk, sheep meat and goat meat, beef and veal were amended.  New coupled 
direct support  was created for durum wheat, nuts, energy crops, starch potatoes, 
seeds, grain legumes, cotton, sugar, t obacco and hops as well as for farmers 
maintaining olive groves was put in place (see C.4 – below).   
 2. Single Payment Scheme (SPS;  see also Annex 1) 
The introduction of the SPS decided in the CAP reform of 2003 re moved links between 
production and support.  The main aims of SPS are to allow farmers freedom to produce to market 
demand, to promote environmentally and economi cally sustainable farming and to simplify CAP 
application for farmers and administrators.  All fa rmers may apply for direct payments.  The single 
payment is an annual income support payment to fa rmers that can be based on different calculation 
methods, depending on the Member States' options of  implementation.  Farmers are free to decide 
what they want to produce in response to de mand without losing their entitlement to support 
(decoupling).  Member States introduced the Singl e Payment Scheme between 2005 and 2007 at the 
latest (with exception of those new Member States,  who are currently applying SAPS and which have 
to introduce SPS by 2011 at the latest.  However, this  latest date is 2012 in the case of Bulgaria and 
Romania).   
 
Member States have two main options of how to calculate the single payment.  The main 
difference is whether they base the SPS on the dir ect payments individual farmers received in the 
historic reference period, thus producing different le vels of SPS for each farmer, or whether all 
payments are averaged out over a state or region.  According to the " historic approach " each farmer 
is granted entitlements corresponding to the paym ents he received during the reference period 
(reference amounts) and the number of hectares he was farming during the reference period and which 
gave right to direct payments in the reference period.  Following the " Regional (flat rate) approach " 
reference amounts are not calculated at individual fa rmer level but at regional level - the sum of the 
payments received by the farmers in the region c oncerned during the reference period.  The value of 
the payment entitlements in that regional model is  established by dividing the regional reference 
amounts by the number of eligible hectares declared by the farmers of the region in the year of SPS introduction.  Finally, each farmer receives a number of (flat rate) entitlements equal to the number of 
eligible hectares declared in the year of SPS introduc tion.  This approach entails some redistribution 
of payments between farmers.  Member States may also calculate SPS payments using a part-
historic/part-flat rate approach. Such " hybrid " systems can further vary over the period between first 
application of the SPS and full implementation, giving rise to dynamic as well as to static hybrid 
systems.  "Dynamic hybrid" systems can act as a vehi cle to transit from the b asic (historic) to the 
                                                     
 
1 Eight measures under the Rural Development policy are also covered by cross compliance.   G/SCM/N/155/EEC 
Page 16  
 
  regional (flat) rate approach.  Member States using the regional model of SPS may also set a different 
unit value of the payment entitlement for permanent pasture or grassland.    
Member States may grant " additional payments " to support agricultural activities that 
encourage the protection or enhancement of th e environment or for improving the quality and 
marketing of agricultural products.  Additional pa yments may use up to 10 per cent of the funds 
available (under national ceilings) in the SPS, t hus reducing the funds available for basic SPS 
payments and product specific direct aids.    
Member States that apply the direct paymen t schemes had the choice to introduce the SPS 
starting January 2005 until January 2007 at the latest.  Application of the SPS will be reviewed within 
two years of its introduction by all EU-15 states (i.e . by 2009 at the latest).  New Member States using 
the Single Area Payment Scheme (SAPS – see point (b) of this notification ) may introduce the SPS 
at any time but by 2011 (2012 for Bulgaria and Romania) at the latest.    
Entitlements were only distributed to farmers actively farming at the date each Member State 
introduced the scheme.  Farmers were allotted payment entitlements based on reference amounts 
(generally amounts of direct payments each farmer  received in the period 2000–02, though different 
calculation options are available for specific cases) .  The value of each entitlement depends on the 
model chosen by the Member State:  historical or regional.  Payments are granted where farmers have eligible hectares at their disposal to activate the appropriate number of entitlements.  Eligible hectares 
normally include all types of agricultural land excep t land used for permanent crops, forests or used 
for non-agricultural activities.  However, certain perm anent crops are still eligible (areas planted with 
hops, bananas or under olive trees).  Any payment entitlement accompanied by an eligible hectare 
shall give right to the payment of the amount fi xed by the payment entitlement.  Transfers without 
land are allowed, but farmers taking over paymen t entitlements can only receive payment if the 
number of entitlements is matched by the correct num ber of eligible hectares.  Farmers (with the 
exception of biological or small-scale farms) are also allocated separate set -aside entitlements that 
may be activated only with set-aside land.   
 
 Member States could decide to apply the Single Payment Scheme after a transitional period 
expiring either on 31 December 2005 or on 31 December 2006.  In such cases, the direct payments to 
be integrated in the SPS apply duri ng the transition period according to rules which are very similar to 
those applied prior to the reform, the main differenc e being that the payments are limited at national 
level.  10 Member States did not use this option and applied the SPS from 2005.  Five Member States used a one year transition period, two Member St ates used a two year transition period (see annex 
overview of implementation CAP Reform in MS).   
 
Within the Single Payment Scheme, farmers w ill receive set-aside entitlements calculated on 
the basis of historic references.  Set-aside entitleme nts will be activated only if they relate to an 
eligible hectare (excluding land unde r permanent pasture in 2003) put into set-aside.  Set-aside land 
may be subject to rotation and may be used for n on-food production.  The basic rate of compulsory 
set-aside is fixed at 10 per cent for the marketi ng years 2005/06 and 2006/07.  Land set aside may be 
used for:  producing materials for the manufacture of products not directly intended for human or 
animal consumption;  and, growing legume crops.    
3. Single Area Payment Scheme (SAPS;  see also Annex 1) 
Article 143b of Council Regulation (EC) No 1782/ 2003 provides for the possibility for the 
new Member States to use, for a transition period ending no later than 2010 (but 2011 for Bulgaria 
and Romania), a specific regime for granting direct payments to farmers.  The Single Area Payment Scheme (SAPS) principles and main elements have  been introduced during the negotiation process in 
order to propose to the new MS a simplified direct payment regime facilitating and reducing the  G/SCM/N/155/EEC 
 Page 17 
 
 
  cost of the preparatory work to be made before and during the first years of accession, there are only 
payments per ha of agricultural land.     SAPS is a decoupled support scheme  based on 2 elements fixed at  national level.  Firstly a 
national financial envelope, to be  established by the Commission which is the sum of all the direct 
payments the Member State concerned would recei ve under former direct payment regimes taking 
into account the applicable phasing-in rate of th e calendar year in question.  Secondly a national 
agricultural area, to be established as the part of the agricultural area that was in "good agricultural 
condition" in June 2003 and to be adjusted according to objectiv e criteria to be approved by the 
Commission (e.g. reduction to take into account that  the Member State concerned could decide not 
granting direct payments to farms smaller than 1 ha).  The SAPS amount per ha results from dividing 
the national financial envelope by the national agricu ltural area of the concerned Member State.  Each 
year farmers shall apply to the scheme, indicating only  the eligible area they are farming.  Where in a 
given year the total land subject to applications is  above the national agricultural area, the payments 
shall be proportionately reduced.  All new Me mber States apart from Malta and Slovenia have 
decided to use SAPS.   
  The Act of Accession of the Czech Republic, Es tonia, Cyprus, Latvia, Lithuania, Hungary, 
Malta, Poland, Slovenia and Slovakia and that of Bulgaria and Romania provide for a transitional 
period for the progressive introduction of the CAP di rect payments to farmers in the new Member 
States, from 25 per cent in 2004 to 100 per cent in  2013 (from 25 per cent in 2007 to 100 per cent in 
2016 in Bulgaria and Romania).  It also establish es the possibility for the new Member States, during 
the transitional period and subject to the approva l by the Commission, to  pay farmers additional 
support in the form of Complementary National Direct Payments  (CNDPs, commonly known as 
"top-ups").    4. Coupled Direct Payments (see also Annex 1) 
Arable crops
 
 
As a result of the 2003 Reform decisions Member States were allowed to retain 25 per cent of 
the component of national ceilings corresponding to the arable crops payments except compulsory set-aside payment or, alternatively, up to 40 per cent of the supplementary durum wheat aid in order to 
continue the existing coupled per hectare payments  up to those percentage levels.  Two Member 
States are using the first option;  no Member State is using the second option.   
 
Protein crops
 
 
For peas, field beans and sweet lupins, the amount of aid is EUR 55.57/hectare.  It is paid 
within the limits of an EU maximum guaranteed ar ea of 1.6 million hectares.  If the area is exceeded, 
the aid is reduced proportionally.    
Rice
 
 
In the framework of the rice reform (notably 50 per cent cut of the inte rvention price) and in 
order to stabilise producers' revenues and to main tain the role of rice production in traditional 
production areas, the pre-reform direct aid is  increased from EUR 52/tonne to EUR 177/tonne 
(converted to a per hectare payment according to nati onal yield coefficients).  Of this, EUR 102/tonne 
is integrated in the Single Payment Scheme on the basis of historical rights limited by the current 
maximum guaranteed area, and the remaining part constitutes the crop specific payment for rice, 
limited by national base areas.   G/SCM/N/155/EEC 
Page 18  
 
  Dairy
 
 
By way of compensation for cuts in dairy intervention prices, from 2004 to 2006 milk 
producers qualify for support payments paid directly  to producers.  These will be paid per calendar 
year, per holding.  The payments c onsist initially of two elements:  dairy premiums  paid equally to all 
milk producers;  additional payments  paid to milk producers according to criteria decided upon by the 
Member States.  The total amounts available for direct dairy premiums in a given year are based on quota held at the end of the preceding quota year at  EUR 8.15/tonne of quota for calendar year 2004, 
EUR 16.31/tonne of quota for calendar year 2 005 and EUR 24.49/tonne of quota for calendar 
year 2006.  At the latest in 2007, Member Stat es shall include these dairy payments in the Single 
Payment Scheme.  There is no option to continue with a combination of SPS and partially coupled 
payments from 2007 for dairy as there is for some other sectors.    
Beef and veal
 
 
Member States may retain up to 100 per cent of the " slaughtering premium for calves " and 
make a product-specific additional payment to farmer s.  Member States may also opt for keeping up 
to 100per cent of the " suckler cow premium " and up to 40 per cent of the " slaughter premium for 
adult bovine animals " coupled.  Alternatively, they may keep 100 per cent of the slaughter premium 
for adult bovine animals coupled or, instead, up to 75 per cent of the " special male premium ".  These 
options are achieved by Member States retaining th e relevant percentages of the components of the 
SPS national ceiling.  The percentage rates also apply to the rate of payment per animal that remains 
coupled.  Consequently, under the partial implem entation of SPS, the premium rates for bovine 
animals (210 or 150 EUR per bulls or steers, respecti vely) for suckler cows (200 EUR per animal), for 
the slaughtering premium (80 EUR per adult animals or 50 EUR per calves should be multiplied with 
the same percentage rates that the Member Stat e decides to maintain as a coupled payment.   
 
The extensification payment (previously ra nging from EUR 40 per animal to EUR 100 per 
animal according to the density chosen by th e Member State), additional payments and the 
deseasonalisation premium are fully decoupled.    
Sheep and goats
 
 
Member States may retain 50 per cent of the sheep and goat premiums (i.e. 50 per cent of the 
sheep/goat component of the national ceiling) as coupl ed payments.  The level of the sheep premium 
has been fixed for several years in advance at EUR 21 per ewe (EUR 16.8 for ewes kept for milk 
production, and for female goats),  plus a EUR 7 supplementary premium payable in Less Favoured 
Areas (LFA) only.  These payment rates should be mu ltiplied with the same percentage rates that will 
remain as coupled payment.  To qualify for the Less  Favoured Area supplement a farmer must have at 
least 50 per cent of his agricultural area in the LFA.  The additional premium may also apply to 
farmers practising transhumance.    
Durum wheat
 
 
For durum wheat a quality premium of EUR 40/hectare, depending on the use of varieties 
recognized as being of a high quality for the production of pasta or semolina, is introduced.  The aid is 
limited to traditional production zon es and to national base areas.   
 
Energy crops  
 
The 2003 CAP reform also introduced a new ai d to encourage the production of crops for 
energy use.  The existing scheme for set-aside land to  be used for the cultivation of crops for non-food 
uses continues.  An aid of EUR 45 per hectare is available to farmers who produce energy crops, 
i.e. crops supplied essentially for the production of the bio fuels or other renewable fuels for transport  G/SCM/N/155/EEC 
 Page 19 
 
 
  as well as electric and thermal energy produced from biomass.  The aid is applied on a maximum 
guaranteed area in the whole EU, of 1 500 000 hectares.  Farmers qualify to receive the aid if their production of energy crops is covered by a contract  between the farmer and the appropriate processing 
industry.   
 
Nuts
 
 
To avoid the potential disappearance of nut produc tion in traditional areas and the subsequent 
negative environmental, rural, social and econom ic consequences, a payment per ha of almonds, 
hazelnuts, walnuts, pistachios and locust beans has been introduced.  It is limited to a maximum 
guaranteed area of 815.600 ha, divided in national guaranteed areas.  The amount of the payment is 
EUR 120,75 per ha.  Member States may grant add itional national aid, up to the same amount.   
 
Starch potato  
 
Forty percent of the pre-existing payment of EU R 110.54/tonne of starch is included into the 
SPS on the basis of historical deliverie s to the starch industry.  Howeve r, in order to maintain starch 
production in traditional areas of production and in r ecognition of the role of potato production in the 
agronomic cycle, the remaining 60 per cent of the payment (EUR 66.32/tonne) is maintained as a supplementary payment for potato starch (paid to growers of starch potatoes upon deliveries).  The starch potatoes payment is paid on the quantities de livered, and adjusted according to the starch 
content of the potatoes.   
 
Olive oil
 
To ensure olive tree maintenance, and thus avoid the degradation of land cover and landscape 
or negative social consequences, a part of the CA P support can be linked to the maintenance of olive 
groves of environmental or social value.  Having d ecided on the proportion of aids to be paid via the 
SPS (60 per cent or more) the remaining aid (up to a maximum of 40 per cent) is retained by Member 
States as " national envelopes " to make additional payments to oliv e groves of environmental or social 
value according to objective criteria (e.g. including asp ects of local traditions and culture, in particular 
in marginal areas).  Within the limits of their nationa l envelopes, Member States may define up to five 
different categories of olive groves eligible fo r support, based on their environmental and socio-
economic value, and fix an aid per hectare accordingl y.  In the interest of simplification, these olive 
grove payments will only be made for amounts of at least EUR 50 per aid claim.    
Seeds
 
 
Member States can decide that some species receive coupled payments.  Amounts of coupled 
aid vary according to the seeds sp ecies.  Member States decide at what point decoupling will 
commence in their territory.    
Hops
 
 
Member States are allowed to reallocate a maximum of 25 per cent of the national ceiling as 
an additional payment to farmers producing hops and/or a payment to producer groups in order to deal 
with specific market situations or with regional implications.    
Tobacco
 
 
Full decoupling will be carried out after a fou r-year transition period that started in 2006.  
During these four years, at least 40 per cent of the tobacco premiums have to be included in the decoupled single payment for farmers.  Member States may decide to retain up to 60 per cent as a coupled payment.  After the four-year transition pe riod, from 2010, tobacco aid will be completely de-G/SCM/N/155/EEC 
Page 20  
 
  linked from production.  Some 50 per cent will be transferred to the SPS and the remaining 50 per 
cent will be used for restructuring programmes in tobacco producing regions under the rural 
development policy.    
Cotton
 
 
With regard to coupled aid, or crop specific payment, an amount will be granted per hectare 
maintained at least until the boll opening under norma l growing conditions.  If the eligible cotton area 
exceeds the basic area, aid is reduced proportionally to the overshot.    
Coupled aid 
Country Area (Ha) Aid (€/ha) 
Greece 370,000  - 594 for 300,000 ha 
 - 342.85 for 70,000 ha 
Spain 70,000 1,039 euro 
Portugal 360 556 euro 
  Sugar
 
 In Member States that have reduced their sugar quota by more than 50 per cent following the 
reform of the sugar sector, a coupled aid is accorded  to producers of sugar beet or sugar cane for a 
period of maximum 5 years.   
D. INTERVENTIONS IN AGRICULTURAL MARKETS PER SECTOR  
1. Arable Crops 
 Arable crops are currently governed by  Regulation (EEC) No 1251/99, as amended by 
Council Regulation (EC) No 1782/200 3 of 29 September 2003, which covers all cereals, oilseeds, 
protein crops, non-fibre flax seeds (or linseed) fibre flax and fibre hemp and set-aside.  For durum 
wheat a special quality premium is applied.   
 (a) Public intervention cereals 
The common market organisation for cereals came  i n t o  f o r c e  o n  1  J u l y  1 9 6 7 .   I t  i s  n o w  
regulated by Council Regulation (EEC) No. 1766/92 until the 2003 agriculture reform which, in the 
interest of clarity, repealed and replaced it with Council Regulation (EC) No 1784/2003 of 
29 September 2003 on the common organisation of the market in cereals (OJ L 270/78 of 
21 October 2003).  This regulation covers the following products:   
  - Grain cereals:  common wheat, durum wheat, barley, rye, oats, maize, buckwheat, 
canary seed, millet and others;   
 
 - Processed products:  flours, goats and meal  of wheat, malt, starch, glucose, cereal-
based preparations, bran, wheat gluten, manioc and potato starch.   
  The cereal marketing year runs from 1 July to 30 June.  One of the market instruments is 
public intervention.  There is one single interventi on price of 1013.1 EUR/t is valid for the following 
cereals:  wheat, maize, sorghum, barley and durum wh eat; there is no obligation to buy in feed wheat.  
Rye has been excluded from the intervention system  in marketing year 2003/04.  The intervention 
price is increased from November to June with m onthly increments of 0.46 EUR/t to cover storage 
costs (technical and financing costs) and thus help  to improve the disposal of cereals in line with 
market requirements.  Two types of intervention measures are involved:    G/SCM/N/155/EEC 
 Page 21 
 
 
   - Buying-in and subsequent operations involving  public stocks:  this concerns buying-in by 
the intervention agencies and the related dispo sal operations.  They give rise to technical 
and financial costs and to losses or gains on sales of stocks.   
 
 - Special measures:  these are measures provided for in Article 7 of the basic regulation 
(No 1784/2003) to avoid situations in which the intervention agencies are forced to buy 
in excessively large quantities of cereals.  The Commission has broad discretionary powers for the application of special measu res and may, if necessary, also adopt 
measures equivalent to carryover payments.   
 
(b) Production refunds for potato and other starch 
There is a minimum price of EUR 178.31/tonne as well as a production refund for starch paid 
to manufacturers and a system of production quotas for potato starch production.  An EU quota is split 
by Member States and then split among starch manufacturing undertakings.  The quota is 1 762 148 tonnes of potato starch for the EU-15 and 186 613 tonnes for the new Member States (an 
EU-25 total of 1 948 761 tonnes).  Aid is paid only in respect of the quantity of potatoes covered by a 
cultivation contract between the potato producer and the starch manufacturer (within the limit of the 
quota allocated to the manufacturer).  The derived starch is used in the food industry and other 
industries.  Arrangements in the potato starch sector are reviewed every three years.    
2. Rice 
(a) Intervention measures 
 The intervention price for paddy rice has b een set at 150 EUR/t since the beginning of 
the 2004/05 marketing year.     The intervention agencies are obliged to buy in any rice ha rvested in the Community and 
offered to them, provided offers are made durin g the open period (April - July) and comply with 
certain conditions, in particular in respect of qua lity and quantity.  The quantities that can be bought 
by the intervention agencies are limited to 75,000 tonnes per year.    
The intervention buying-in price is fixed for a given standard quality.  If the quality offered 
differs from the standard quality, the price is ad justed by the application of price increases or 
reductions.  It is applicable in all the Community  intervention centres fixed at the beginning of the 
marketing year.    
3. Dairy Products 
(a) Intervention measures 
The intervention prices are as follows:   
 
Intervention price valid for 2004/2005 2005/2006 2006/2007 2007/2008 
1. Butter 305,23 282,44 259,52 246,39 
2. Skimmed milk powder 195,24 184,97 174,69 174,69 
 
 Under the intervention mechanism, as amended in March 1987 and to apply until the end of the 
additional levy system, intervention buying-in may be limited when certain conditions are met.  
Since July 1987, intervention butter has been bought in under a tendering procedure.  Butter is bought in 
at a maximum price that is fixed in relation with the bids received by the Commission, but not lower than 90 per cent of the full intervention  price.  As from 1 March 2004, butter is only bought into public storage G/SCM/N/155/EEC 
Page 22  
 
  at 90 per cent of the intervention price during th e period 1 March to 31 August.  Where the quantity 
offered to intervention during th is period exceeds 70,000 tonnes
2, the obligatory intervention may be 
suspended and buying-in may be carried out under a tendering procedure.  Skimmed milk powder can 
only be bought between 1 March and 31 August each year .  Purchases can be suspended when the annual 
quantity offered reaches 109,000 tonn es and then be carried out under a tendering procedure.   
 
(b) Aid to private storage 
 Aid for private storage of milk powder, butter and certain cheeses produced in the Union is or 
may be granted:    
 - for top quality skimmed milk powder:  only wh en the market situation justifies the aid;   
 - for butter stored for at least three months and between 15 March and 15 August;  the aid can 
be paid for a storage period of maximum 210 days;   
 - for certain cheeses:  Grana Padano aged at least nine months old, Parmigiano-Reggiano 
aged at least 15 months old and Provol one at least three months old.   
 
 In years where a serious imbalance can be reduced or eliminated by seasonal storage aid can be granted for private storage of the long-keeping cheeses Emmental type and of certain goat or ewe milk 
cheeses.    (c) Aid for skimmed milk for animal feed 
 Aid is granted for skimmed milk powder intended for animal feed.   
  The milk powder must be either directly dena tured or incorporated in some compound feeding 
stuff intended for livestock.    
(d) Aid for skimmed milk processed into casein 
 Aid is granted for skimmed milk produced in  the Community and processed into casein and 
caseinates, provided both the milk and the casein pr oduced from it comply with certain conditions.   
 (e) Other measures 
 - When surpluses of dairy products develop, or threaten to develop, measures other than the 
above may be taken to facilitate their disposal or to prevent the development of new 
surpluses.  A number of measures are currently in force to facilitate butter disposal on the 
Community market; inter alia , aid is granted for use in the form of concentrated butter for 
cooking, incorporation in certain foodstuffs a nd for direct consumption by certain categories 
of persons or institutions.   
 
 - In order to encourage consumption by young pe ople, aid is granted to Member States which 
operate an aid programme for milk  distributed in schools so that  pupils can obtain milk at a 
reduced rate.   
                                                     
 
2 The quantity of 70,000 tonne s for 2004 is reduced by 10,000 tonnes per year until reaching 
30,000 tonnes in 2008.    G/SCM/N/155/EEC 
 Page 23 
 
 
  (f) Additional levy payable by producers or purchasers of cows' milk 
 The additional milk levy scheme, introduced in 1984, is designed to reduce the imbalance 
between supply and demand for milk and milk products.     Starting on 1 April of each year, and renewe d in 2004 for eleven consecutive periods of 
twelve months, Member States collect a levy from farmers on quantities of cow's milk or other milk 
products marketed during the relevant twelve-m onth period in excess of the maximum reference 
quantities allocated to each Member State.     The levy is administered separately for tw o types of activity, one for deliveries to an 
undertaking approved by a Member State and the other for direct sales to the consumer.  When the 
Member States exceed their national reference quan tity producers who contributed to the overrun pay 
the proportional levy.  The revenue of individual le vies is for 99 per cent transferred to the European 
Agricultural Guidance and Guarantee Fund (EAGGF).  1 per cent can be withhold to solve difficult 
cases.   
 
 The Council has fixed the corresponding quantiti es for each Member State. Until the quota 
year 2003/2004 the rules were fixed by Regulation (EEC) No. 3950/92 (OJ L405 of 31.12.92).  As from 1 April 2004 the rules are fixed by Regulation (EC) No. 1788/2003 (OJ L270/123 of 21.10.2003) lastly amended by Regulation (E C) No 2217/2004(OJ L375 of 22.12.2004).   
 
 Since 1 May 2004 10 New Member States joined the EU.  For the quota year 2004/2005 
starting on 1 April 2004 the total quantity of milk quot a is 137.34 million tonnes.  The total quantity is 
split-up in 134.87 million tonnes for deliveries and 2.47 million tonnes for direct sales.  In case of non-respect of the milk quota for the quota year 2004/2005 the levy for 100 kg of milk is set at EUR 33,7.   
 
4. Olive Oil 
 As part of the second wave of the June 2003 CAP reform (agreed in April 2004), support for 
olive growers was largely decoupled  (i.e. not linked to quantities produced) and integrated into the 
SPS.  CAP reform provides for each Member State to be able to use amounts up to a specified 
"national ceilin"  of direct aids to assist producers.  As  soon as the SPS was implemented for the olive 
sector (as of 1 January 2006) the previous system of production aid, paid up to a national limit (the 
maximum guaranteed quantity), was abolished.     The European Commission pursues the implementation of a strategy for the quality of olive 
oil adopted in 2001.  The olive oil regulatory "regime" sets marketing standards for olive oil 
concerning the packaging, labelling, presentation a nd advertising required for marketing in the EU, 
thus providing important safeguards for consumers and allowing producers to maximise the benefits 
of selling a quality product.     Member States may use up to 10 per cent of their national envelope for quality measures 
under activity programmes carried out by operator or ganisations (though, if the chosen decoupling 
rate is higher than 60 per cent, the maximum of 10 per cent would apply to the decoupled element and 
not to the national envelope).    
5. Sugar 
 A reform of the sector was implemented as fro m 1 July 2006.  There will be a 36 per cent 
price cut over four years beginning in 2006/07.  Publ ic intervention will be abolished after a four-year 
phase-out period and the intervention price w ill be replaced by a reference price:   
 G/SCM/N/155/EEC 
Page 24  
 
   Reference price for white sugar (EUR/t): 
 
 2006/07 2007/08 2008/09 2009/10 
Reference price 
for white sugar 631.9 631.9 541.5 404.4 
Reference price 
for raw sugar 496.8 496.8 448.8 335.2 
 
 There is a private storage system as a safet y net in case the market price falls below the 
reference price.  For the reduced support price fa rmers will receive compensation at an average of 
64.2 percent based on the final price cut of 36 pe r cent.  The compensation will be decoupled and 
included in the Single Payment Scheme.  
 
 The existing "A" and "B" quotas are merged in to a single production quota and in those 
countries that give up at least 50 percent of their quot a there is the possibility of an additional coupled 
payment of 30 percent of the income loss for a maxi mum of five years, plus possible limited national 
aid.  To maintain a certain production in the current "C" sugar producing countries, an additional 
amount of 1.1 million tonnes will be made availabl e against a one-off payment corresponding to the 
amount of restructuring aid per tonne in the firs t year.  Sugar for the chemical and pharmaceutical 
industries and for the production of bio-etha nol will be excluded from production quotas.   
  Sugar beet qualifies for set-aside paymen ts when grown as a non-food crop and also be 
eligible for the energy crop aid of 45 euros/hectare.   
 
 A voluntary restructuring scheme lasting 4 years for EU sugar factories and isoglucose and inulin syrup producers was created, consisting of a payment to encourage factory closure and the 
renunciation of quota as well as to cope with the soci al and environmental impact of the restructuring 
process.  This payment will be 730 euros per tonne in  years one and two, falling to 625 in year three, 
and 520 in the final year.  There is also the possib ility to use some of this fund to compensate beet 
producers affected by the closure of factories.  Both these payments will be financed by a levy on 
holders of quota, lasting three years.    
6. Bovine Meat 
(a) Public intervention 
 Public storage of beef plays continues to play a limited role in supporting the beef market.  
The EU now buys beef into " intervention " stores only when prices fall to EUR 1 560/tonne in a 
Member State or region.    (b) Private storage 
 There is also a system of Private Storage Ai d under which private traders are encouraged, by 
means of a partial subsidy, to store beef temporarily  at times of oversupply.  With the reforms, public 
intervention has thus become a "safety net" rather  than a market management tool, and an aid to 
private storage is the preferred option to  deal with temporary oversupply.   
 7. Pigmeat 
1. A basic price is fixed for meat of domestic swine, presented in carcasses or half carcasses of a 
standard quality.  The basic price stands at 150,94 EUR/100 kg (Reg. 2759/75).    2. Intervention measures may be taken in form of  aid for private storage, which is granted to 
operators satoring pigmeat on their own expense.   This measure may be taken when, on the  G/SCM/N/155/EEC 
 Page 25 
 
 
  representative markets in the Community, the averag e Community price for pig carcasses is less, and 
is likely to remain less, than 103 per cent of the basi c price.3.  Public intervention is also provided for 
in the basic Regulation (EEC) No. 2759/75 but has not been used since more than 20 years.   
 
8. Sheepmeat and Goatmeat 
 Private storage 
  The Commission may decide to grant private stor age aid when there is a particularly difficult 
market situation in one ore more quotation areas.  Quotation area shall mean: Great Britain, Northern 
Ireland, every other Member State taken separately.  The aid shall be introduced in the framework of a 
tendering procedure.  However, it may be decided to grant aid in the framework of an advance fixing 
procedure where urgent recourse to private storage proves necessary.    
9. Fruits and Vegetables 
(a) Measures to promote the formation of producers' organisations 
 In order to encourage the formation of produ cer organisations and f acilitate their operation, 
aid can be granted to such organisations est ablished on the initiative of producers.  These 
organisations are to promote the concentration of supply, its adjustment to demand, the implementation of environmentally sound practices, the regularisation of prices at the producer stage 
and to make suitable technical means availa ble for presenting and marketing products.   
 
The following may be granted: 
 
(i) During preliminary recognition, (a) an aid to encourage the formation of the producer 
organisation and facilitate its administrative opera tion;  (b) an investment aid, either by  
special loan or in capital grant, to cover part  of the investment costs  required to attain 
recognition.   
(ii) After recognition, a final assistance li mited to 50 per cent (60 per cent under certain 
conditions) of the actual expenditure of the ope rational funds, capped at (the most) 4.1 per 
cent of the value of the marketed production of each PO.  Those funds are used to finance the 
operational programme of the producers' or ganisation as well as market withdrawals, 
supplementary to those of the normal scheme. 
(b) Intervention measures 
For certain fruit and vegetables (Cauliflower, tomatoes, aubergines, melons, watermelons, 
apricots, peaches and nectarines, table grapes, appl es, pears, lemons, oranges, mandarins, clementines 
and satsumas) producer organisations can decide  to withdraw products from the market.   
 
If such decision is taken, growers receive a Community withdrawal compensation up to a 
ceiling expressed as a percentage of the marketed qu antity.  The ceiling for this compensation is, for 
each marketing year, 10 per cent (5 per cent for citr us and 8.5 per cent for apples and pears) of the 
marketed quantity.    (c) Special measures for citrus fruit 
In order to encourage processing of products not very well adapted to th e fresh market, an aid 
is granted to producer organisations for the qua ntities delivered to processors, within contracts 
concluded before the beginning of the season.  Th is regime covers lemons , grapefruit, oranges, 
mandarins and clementines processed into juice and clementines and satsumas processed into 
quarters.   G/SCM/N/155/EEC 
Page 26  
 
  (d) Special measures for nuts 
In order to encourage the nut sector (almonds, hazelnuts, walnuts, pistachios and carobs) to 
modernise existing production and marketing conditions, provision has been made, in the beginning of the 90s, for the following for the benefit of organisations of nut producers:  
- Special aid for their establishment;   
 
- Aid for the establishment of a working capital fund to allow storage and improve 
marketing;   
 
- Aid to improve varieties and cultivation and modernise marketing under a ten year 
plan to be presented by producers' organisations;   
 
- Participation in promotion drives orga nised in collaboration with the various 
economic operators in this sector.   
 
This aid was granted to the producers' organisa tions only to the extent that they furnish a 
substantial proportion of the funds used to promote these activities.  This regime has not been renewed after 1996.  Therefore, the l ast approved plans ended in 2006.   
 
10. Bananas 
(a) Measures to promote the formation of producers' organisations 
In order to encourage the formation of producer s' organisations and facilitate their operation, 
aid can be granted to such organisations est ablished on the initiative of producers.  These 
organisations are to promote the concentration of  supply and the control of prices at the producer 
stage and to provide members with appropriate techni cal facilities for packing and marketing bananas.   
 
Start-up assistance may be granted during the first five years following recognition of the 
organisation, amounting to 5 per cent, 5 per cent, 4 pe r cent, 3 per cent, and 2 per cent of the value of 
the production marketed, for each successive year, pr ovided that the actual cost of establishing and 
administering the organisation are not exceeded.    
As of January 2007, such assistance can be  granted only to producers' organisations 
recognised by the Member States no later than 31 D ecember 2006, and to whom aid has already been 
paid prior to that date.    (b) Compensatory aid to producers 
By 31 December 2006, compensatory aid was payable to all producers who were members of 
a recognised producers' organisation, and also to individual producers who were unable to join such 
an organisation.  This was limited to an annual maximum of 867.500 tonnes for all EC producers.   
 
This compensation was calculated as the difference between a "flat-rate reference income" 
and the "average production income" at ex-packing station stage obtained on the Community market 
during the relevant years for bananas produced and marketed within the Community.  The reference 
income was fixed at 640,30EUR/tonne ex packing station.  In 2005, the aid amounted to 59 EUR/tonne for a total of 642.568 tons.  In 2006, the aid was fixed at 185,6 EUR/tonne for a total 
of 635.034 tonnes.  A supplementary aid was al so granted to regions that have experienced 
significantly severe market circumstances.  This suppl ementary aid was decided on a yearly basis.  In 
2005 and 2006, a supplementary aid was paid to producers of Martinique and Guadeloupe in the  G/SCM/N/155/EEC 
 Page 27 
 
 
  French West Indies as well as Crete and L aconia in Greece, for an average amount 
of 103,8 EUR/tonne in 2005 and of 109,8 EUR/tonne in 2006.    
As of 1 January 2007, the described system of compensatory aid for banana producers was 
abolished, and replaced by the following measures:   
 
(c) Aid to producers in the outermost regions 
Council Regulation (EC) No 247/2006 of 30 January  2006 provides for the establishment of EU 
support programmes for the outermost regions containing specif ic measures to assi st local agricultural 
production.  This instrument is best adapted to support banana production in each of the regions 
concerned, allowing the respective Member States to propose measures, in the framework of their 
overall support programmes, which take account of  regional particularities.  The Commission will 
undertake a review of the workings of  the scheme by the end of 2009, an d earlier if there are substantial 
changes to the economic conditions affecting livelihoods in the outermost regions.    
 The budgetary allocation of the POSEI scheme has been increased by EUR 278,8 million in 
order to fully include EU support to banana producer s in those programmes as  of 1 January 2007, hence 
reinforcing the coherence of the stra tegies for support of agricultural pr oduction in these regions.  At the 
request of the producing Member Stat es, this aid will be distributed  to the producing regions following 
the share in the year 2000:  Spain 50.4 per cent,  France 46.1 per cent, Portugal 3.1 per cent and 
Greece 0.4 per cent.   
 
(d) Aid to producers in other banana regions (Greece, continental Portugal and Cyprus) 
For Greece, continental Portugal and Cyprus, it is no longer necessa ry to provide for a specific 
aid scheme for bananas, given the small proportion of total EU production co ncerned.  The reform 
therefore shifts aid from production support to  producer support, by abolishing the existing 
compensatory aid scheme for bananas and including it into the Single Payment Scheme.  Member States 
will establish the reference amount s and eligible hectares  under the Single Payment Scheme on the basis 
of a representative period appropriate to the bana na market.  The national ceilings for Greece and 
Portugal will be increased by EUR 1.1 million a nd EUR 0.1 million respectively.  An additional budget 
is also proposed for the implementation of the Single Payment Scheme in Cyprus, where about 
10,000 tonnes of bananas are grown.  The additiona l amount would be phased in as of 2009 and would 
reach a full level of EUR 3.4 million in 2013.  In order to encourage the formation of producers' 
organisations and faci litate their operation, aid can be granted to such organisations established on the 
initiative of producers.  These orga nisations are to promot e the concentration of supply and the control 
of prices at the producer stage and to provide member s with appropriate technical facilities for packing 
and marketing bananas.   
 
11. Processed Fruits and Vegetables 
(a) Production aid 
A Community aid scheme assists producer organisations ("POs") supplying tomatoes, peaches 
and pears harvested in the Community for the prod uction of some defined processed products.  This 
scheme is based on contracts, to be conclude d before the marketing year, between POs and 
processors.  The amount of aid has been fixed at  EUR 34,50/tonne for tomatoes, EUR 47,70/tonne for 
peaches and EUR 161,70/tonne for pears.    G/SCM/N/155/EEC 
Page 28  
 
  For each of these products, Community and national processing thresholds have been 
established as follows (n et weight fresh product, in tonnes) :   
 Tomatoes Peaches Pears 
Community threshold 8 251 455 
8 860 061 539 006 
560 428 104 617 
105 659 
Bulgaria 156 343 17 843 --- 
Czech Republic 12 000 1 287 11 
Greece 1 211 241 300 000 5 155 
Spain 1 238 606 180 794 35 199 
France 401 608 15 685 17 703 
Italy 4 350 000 42 309 45 708 
Cyprus 7 944 6  
Hungary 130 790 1 616 1031 
Malta 27 000   
Netherlands - - 243 
Austria - - 9 
Portugal 1 050 000 218 600 
Romania 50 390 523  National thresholds 
Slovakia 29 500 147  
 
Whenever a Community processing threshold is overrun, the aid fixed for the product in 
question shall be reduced, for the following marketi ng year, in all the Member States in which the 
corresponding threshold has been overrun.  The reduc tion in aid shall be proportional to the volume of 
overrun relative to the relevant threshold.  Fo r example, due to such an overrun for the 2002/03 
2007/2008 marketing year in the pears tomatoes sector, the aid fixed for Spain has been cut by 63 per 
cent Greece, and Italy by 20 per cent and France for the 2003/2004 marketing year shall be decreased 
by 51,1 per cent, 24,4 per cent and 3,4 per cent from the level above mentioned.   
 (i) A production aid scheme applies to dried figs and to prunes derived from dried 
"d'Ente" plums.  This aid shall be granted to processors who have paid producers for their raw 
materials a price not less than the minimum pri ce, under contracts with recognised POs.  This 
production aid may not exceed the difference between the minimum price and the price of the 
raw material in the main producing and e xporting third countries.  For the 2002/03, 
2006/2007 marketing year, these amounts have been fixed as follows:   
 
(EUR/tonne) Dried figs Prunes 
minimum price 878,86 
967,69 1935,23 
production aid 286,0 
258,57 671,73 
652,66  G/SCM/N/155/EEC 
 Page 29 
 
 
   (ii) An aid is granted for the cultivation of grapes intended for the production of dried 
grapes of the sultana and Muscatel varieties and cu rrants.  The amount of this aid is fixed per 
hectare of specialised area harvested.  A maximum guaranteed Community area has been 
fixed at 53 000 53 187 hectares.  If the specialised  area used for the production of dried grapes 
during a marketing year exceeds that maximum guaranteed Community area, the amount of 
the aid shall be reduced for the following mark eting year according to the extent by which 
that area has been exceeded.  Fo r the 2002/03 2006/2007 market ing year, this aid has been 
fixed at 3 290 3 569 EUR/ha for sultanas, 3 080 3 391 EUR/ha for currants and 880 969 EUR/ha for Muscatel.   
 
 (iii) During the last two months of a mark eting year, "Storage agencies" may buy-in 
sultanas, currants and dried figs produced in  the Community.  The quantities of sultanas and 
currants so bought-in may not exceed 27 37027 930 tonnes.  A storage aid may be granted to the storage agencies.  For the 2001/022005/2006 marketing year, these amounts have been 
fixed at the following levels:   
 
 Dried grapes Dried figs 
Buying-in price 
(EUR/tonne) 445,65 444,81 542,70 
Storage aid 
(EUR/tonne/day) 0,1405 0,1108 until 28.2.20073, 
0,1144 0,0848 from 1.3.20073 0,1261 0,0934 
 
 12. Wine 
 On 1 August 2000 the current common organisation on the market in wine entered into force 
(Council Regulation (CE) N° 1493/99).     The concrete implementing provisions for the market mechanisms
, which are aid for private 
storage of wine and must, distillation of wine and aid for the use of grape must, are laid down in 
Commission Regulation (EC) N° 1623/2000, as last modified by Commission Regulation (EC) N° 2016/2006.     The concrete implementing provisions for the structural measures are laid down in 
Commission Regulation (EC) N° 1227/2000, as last modified by Commission Regulation (EC) 
N° 1460/2006.    (a) Aid for private storage of table wines and grape must (Art. 23-39 of Reg.1623/00) 
 The measure aims to encourage wine producers to use storage in order to stabilise supply during 
the marketing year.  The aid is fixed per hl of product and per day.  From the 2000/2001 marketing year 
on it was set at 0,01544 € for table wine, 0,01837 € for grape must and 0,06152 € for concentrated and 
rectified grape must.     The first day of storage may not be later than  16 February and storag e shall expire between 
1 August and 30 November for all grape must and between 1 September and 30 November for table 
wines.   
  The total amount financed by the EAGGF in 2005 was 69 571 712 €.   G/SCM/N/155/EEC 
Page 30  
 
  (b) Distillation 
(i) Compulsory Distillation 
 The aim of this distillation scheme under Ar t. 27 of Council Regulation (EC) 1493/1999 is to 
avoid overpressing of grapes and thus manufacture of poor quality wines.  The price to be paid by the distillers to producers for the marc, wine lees or wi ne delivered was 0,995 €/°V ol/hl.  Articles 48-51 of 
Reg.1623/00 determine that distillers rece ived a Community aid varying between 0,2777 €/°Vol/Hl and 
0,8453 €/°Vol/Hl depending on the type of product they dis til.   
 
This measure under Art. 28 of Council Regulation (EC) 1493/1999, relates to wines from 
grapes intended at the same time for wine maki ng and for other purposes (case of grapes used for 
wine spirits produced in the French Charentes regi on, of grapes intended for drying in Greece or table 
grapes in Italy).  In order not to overburden the market for table wines, all quantities of these wines 
exceeding the quantities traditionally vinified have to be distilled.  The minimum price to be paid to 
the producers of the wines concerned was set by Art. 52-57 of Reg.1623/00  for all wine at an average 
price of 1,340 €/°Vol/hl.  Dis tillers received a Community aid va rying between 0,8453 €/°Vol/Hl and 
0,7728 €/°Vol/Hl depending on the ty pe of product they distil.   
  The price to be paid to distillers for raw al cohol, when delivered to the intervention agency, 
has been fixed as follows:   
(ii) Optional Distillation 
The distillation into drinkable alcohol (Art. 63-64 of Reg.1623/00 
is a distillation scheme for 
table wines to facilitate delivery to the traditiona l drinkable wine alcohol market (distillation under 
Art. 29 of Council Regulation (CE) N°1493/1999).  Since the marketing year 2002-2003 its volume 
was limited to 25 per cent of the highest volume of  wine produced by each individual producer in the 
previous 3 years.    
The price to be paid to wine producers was fi xed at 2,488 €/°Vol/Hl.  The Community aid 
offered to distillers ranged betw een 1,751 €/°Vol/Hl and 1,884 €/°V ol/Hl, again depending on the 
type of product obtained by dis tillation.  In addition, distillers can receive a secondary aid for the 
storage of alcohol, which was set since the wine year 2002/2003 at 0,00042 € per °Vol per hl of 
product and per day.    
Crisis distillation as foreseen under Art. 30 of  Council Regulation (C E) N°1493/1999, may be 
opened "if there is an exceptional case of market  disturbance caused by serious surpluses and /or 
problems of quality".  The measure can be limited to certain categories of wine or certain areas of production but may also include quality wine.    
During the marketing year 2004/2005 and 2005/ 2006 requests for Crisis Distillation were 
granted for respectively 7 474 700 Hl and 5 402 300 Hl.    
The total amount financed by the EAGGF in 2005 for distillation and storage was 505 481 219 €.   
 (c) Aid for the use of grape must 
(i) Aid to grape must used in the wine-making process 
Aid is granted in respect of concentrated grape must and rectified concentrated grape must used 
to increase the alcoholic strength of wi nes as foreseen by Art.12 of Reg.1623/00
.  It shall compensate the 
difference between the cost of enrichment by means of grape must and sucrose, respectively.     G/SCM/N/155/EEC 
 Page 31 
 
 
  The aid was fixed, per degree of potential alcoholic strength per hectolitre as follows:   
 
- for concentrated grape must prepared fr om grapes originating in the wine-growing 
zones C III (a) and C III at 1,699 €/°Vol/Hl, and prepared from grapes originating in 
other zones at 1,446 €/°Vol/Hl;   
 
- for rectified concentrated grape must prep ared from grapes originating in the wine-
growing zones C III (a) and C III at 2,206 €/°Vol/Hl and prepared from grapes originating in other zones at 1,955 €/°Vol/Hl.   
 (ii) Aid for the manufacture of grape juice 
Aid is granted for grapes, grape must and concentrated grape must intended for 
manufacturing grape juice or for manufacturing other comestible products from such grape juice.   
  The amount of the aid, as foreseen by art. 9 of Reg.1623/00,
 has been fixed at 4,952 € per 
100 kg of grapes;  6,193 € per hectolitre of grape must  and at 21,655 € per hectolitre of concentrated 
grape must produced.    
(iii) Aid for the manufacture of certain produc ts in the United Kingdom and in Ireland 
The amount of aid for preparations fa lling within CN Heading 22.06.00, which are traditionally 
called "British and Irish wines", have been fixed by art. 18a) of Reg. 1623/00,
 at 0,2379 €/kg of 
concentrated grape must used.  The product must be obtained entirely from grapes produced in wine-
growing zones C III (a) and C III (b).    
The amount of aid for preparation of certain products enabling the consumer to obtain therefrom 
a beverage in imitation of wine ("home-made wine"), which are also traditional in the United Kingdom 
and Ireland, have been fixed by art. 18b) of Reg.1623/00,
 at 0,3103 €/kg of the product obtained.   
 
Access to all these support measures is reser ved to producers who have fulfilled their 
obligations regarding compulsory distillation.    (d) Structural measures 
(i) Abandonment premiums 
 Member States may determine the eligible area s and conditions for the implementation of this 
measure, including the amount of the premium.  EU legislation sets maximum amounts for financing 
at Community level.    
 The total amount financed  by the EAGGF in 2005 for abandonment premiums was 
30 444 533.47€.    
(ii) Restructuring and conversion 
 In order to assist further the adaptation of s upply to market needs, a scheme for restructuring 
and conversion of production potential, both in te rms of quality and quantity, was introduced under 
the reform.  Member States have to determine th e regions, types of production eligible and the 
amounts of these aids.  Wine producers receive up to 50 per cent of the restructuring or conversion costs (75 per cent in regions under Objective 1 of the Structural Funds) plus compensation for the 
temporary income loss for a maximum of three years.   G/SCM/N/155/EEC 
Page 32  
 
   Decision 2006/669/EC laid down the final allocation for 2005/06 as follows: : 
Member State Superficies (Ha) Allocations (Euro) 
Czech Republic 634 803.923 
Germany 1.966 12.497.530 
Greece 788 5.700.190 
Spain 23.325 158.047.002 
France 12.302 108.193.418 
Italy 14.714 96.673.218 
Cyprus 191 2.286.674 
Luxembourg 7 56.000 
Hungary 1.482 10.645.176 
Malta 20 109.815 
Austria 1.347 6.583.657 
Portugal 6.437 44.412.387 
Slovenia 298 2.338.514 
Slovakia 221 521.555 
Total 63 732 ha 448.869.060 € 
 
 13. Tobacco 
 The Council decided far reaching reforms in 2004.  The overall aim is to allow tobacco 
producers to adjust to a situation where product suppo rt will be phased out.  There is a move towards 
full decoupling, and a shift of part of the presen t support into measures that assist tobacco producing 
regions to adjust.   
 
 For 2005 the market organisation was s till regulated by Council Regulation (EEC) 
No. 2075/92, stipulating a system of premiums, gu arantee thresholds and the contribution to the 
"Community Tobacco Fund"
3 fixed for 2004.   
 
                                                      
3 The Community Tobacco Fund was established by Council Regulation No 2075/92 .  The purpose of 
the Fund is to finance:   
• information and education actions which improve public awareness of  the harmful effects of tobacco 
consumption, collection of data to establish tobacco consumption patterns and studies on nicotinism;   
• actions to help tobacco growers to switch to other crops or other economic activities and studies of the 
possibilities for tobacco growers to do so.    G/SCM/N/155/EEC 
 Page 33 
 
 
   In 2006, the reform started with the transfer of  all or part of the current tobacco premium into 
entitlements for the Single Payment Scheme.  Contri butions to the Community Tobacco Fund will be 
4 per cent of coupled payments in respect of the 2006 harvest and 5 per cent in respect of 
the 2007 harvest.    14. Textile Fibres 
(a) Cotton 
The Council Regulation (EC) No 1051/2001 on production aid for cotton applies till the 
marketing year 2005/2006.  Aid per tonne of unginned  cotton is equal to the difference between an 
objective price per hectare and the world market pr ice calculated by the Commission, provided that 
the producer received a minimum price per tonne of unginned cotton.  Moreover, the aid is paid only 
if the products are of sound and fair merchantab le quality.  A NGQ's of 1,031,000 tonnes distributed 
between Greece (782,000 tonnes) and Spain (249,000 tonnes) were established.  In case the NQG has 
been overshot, the Commission reduces the guide pri ce.  Member States are required to take the 
environmental measures and to determine a sanction arrangement and to take the measures necessary 
to ensure their implementation.   
  Approved inter-branch organizati ons can be made up to ensure the ginner receives supplies of 
satisfactory quality of cotton.  These organizations may decide that a maximum of half of the total 
amount of the aid to which its member producers ar e eligible is differentiated according to a scale 
concerning in particular the quality of the unginned cotton to be provided.  Member farmers of the 
organization shall be granted an  additional aid of 10 €.   
  The last modification of the regime of cotton was introduced by Council Regulation (EC) No 1782/2003.  As from 2006 the cotton producers would benefit from decoupled aid and from a crop specific payment under certain conditions.   
 
(b) Fibre flax and hemp 
After the deep reform of 2000, the support measu res in this sector comprise a payment for the 
producer of the straw of flax and hemp and an ai d for the processor of the straw into fibre.   
(i) Production aid 
Flax and hemp grown for fibre are included in to the general support system for producers of 
certain arable crops since the 2001/2002 marketing year .  Therefore, an aid is granted in the form of 
payment per hectare at the same level and on the same terms than for other arable crops.   
Likewise, after the new Single payment scheme come into force, surfaces under flax and 
hemp grown for fibre will be eligible for this new regime, as well as for the optional arable crops area 
payment, in those countries where this measure is applied.   
(ii) Aid for processing the straw of flax and hemp into fibre 
An aid for processing the straw into fibre is gran ted in order to ensure the maintenance of the 
economical activity in this sector.  The aid is granted to authorised primary processors on the basis of the quantity of fibre actually obtained from straw.   Nevertheless, in cases where the farmer retains 
ownership of the straw, which he is having pro cessed under contract, and proves that he has placed 
the fibres obtained on the market, the aid is granted to the farmer.   
 G/SCM/N/155/EEC 
Page 34  
 
  A sale/purchase contract must be concluded between  the farmer and the authorized processor.  
In cases where they both are one and the same person, the contract is replaced by a processing commitment.    
The amount of the aid distinguishes between high quality long flax fibre and low quality 
fibres:   
 
For long flax fibre: 
 
EUR 100 for the 2001/2002 marketing year.   
EUR 160 for the 2002/2003 to 2005/2006 marketing years.   
EUR 200 from the 2006/2007 marketing year onwards.   
 
For short flax and hemp fibre: 
 
EUR 90 for the 2001/2002 to 2005/2006 marketing years.   
 
The reason for the increase in long flax fibre pa yment is the comparable decrease of direct 
payment for farmers foreseen in the aid scheme fo r arable crops for those marketing years.  The 
continuance of the short flax and hemp fibres pa yment beyond the 2005/2006 marketing year will be 
examined at the end of 2005.   
 
The aid is granted within a maximum guaranteed quantity per marketing year of 
80 823 tonnes for long flax fibre and 146 296 tonnes for short flax and hemp fibre.  These amounts are apportioned among the Member States as national guaranteed quantities.    
(c) Silkworms 
Community regulations in the silkworm-rearing sector include the following measures:   
 
(i) Production aid 
 Aid for silkworms, reared in the Community, ha s been established in order to provide silk 
producers with a fair income.  The amount of this aid is fixed annually for each box of silk utilised.  The 
aid is given to the rearer who successfully rears silkworms.   
  Since 1999/2000, the aid is fixed at 133.26 EUR/box.     In the context of 2000/2001 package prices, th e Commission has contin ued the multi-annual 
approach followed for Agenda 2000 and previous refo rms by fixing an amount for the sector for an 
undefined period.    
(ii) Aid to improve quality 
 Community measures may be taken to improve the quality of silkworms and silkworm eggs.  
However, no such measure has been taken to date.   
 
15. Dried Fodder 
 With the 2003 reform support in the dried fodder sector is redistributed between growers and 
the processing industry, on an approximately 50/50 basi s.  Direct support to growers will be integrated 
into the SPS, based on their historical deliveries to the industry (within national ceilings).  A 
processing aid is fixed at EUR 33/tonne as from 2005/2006 within the MGQ system (see below)  G/SCM/N/155/EEC 
 Page 35 
 
 
  equally for dehydrated and for sun-dried fodder.   After the drying process fodder must have a 
minimum protein content and a maximum moisture content.     The is a system of " Maximum Guaranteed Quantities " (MGQs) for dried fodder production.  
A single dried fodder MGQ for the EU-15 of 4 855 900 tonnes merges the previous maximum 
guaranteed quantities for dehydrated and sun-dried f odder.  For the new Member States there is a 
separate MGQ of 104 823 tonnes.  The total EU-25 MGQ thus amounts to 4 960 723 tonnes.  The MGQ is split into Guaranteed Na tional Quantities (GNQs) by Member State.  Under this system, 
penalties are imposed (aid reductions) if the EU MGQ is exceeded in any one year, the penalties 
applying in those countries responsible for th e overrun.  If EU dried fodder production during a 
marketing year does not exceed the MGQ, the full aid may be paid.   
  The EU is committed to reviewing the aid syst em for dried fodder before 30 September 2008, 
on the basis of a report presented by the Commissi on with, if necessary, appropriate proposals.  
 16. Seeds 
 From 2005/2006 on full decoupling applies gene rally in the seeds sector.  However, Member 
States can decide that some species receive c oupled payments.  Amounts of coupled aid vary 
according to the seeds species.  Member States de cide at what point decoupling will commence in 
their territory.    17. Hops 
 Support for hops will be fully integrated into the decoupled Single Payment Scheme 
from 2005.   
E. P
ROMOTION OF AGRICULTURAL PRODUCTS IN EU AND THIRD COUNTRIES  
The EU can assist in financing measures for the promotion of agricultural products and food 
on the EU Internal market and in third countries.   These measures can consist of public relations, 
promotional or publicity actions, par ticipation at events and fairs, in particular, those that highlight the 
advantages of EU products, especially in terms of quality, hygiene, food safety, nutrition, labelling, 
animal welfare or environmental friendliness of their production.  Also covered are information 
campaigns on the EU system of protected designations of origin (P.D.O), protected geographical indications (P.G.I) and traditional speciality guara nteed (T.S.G.), information on EU quality and 
labelling systems and on "organic farming".   
 
The EU co-finances these measures with an a nnual budget of approximately € 50 million and 
by an amount not exceeding 50 per cent of the total cost of approved programme, the remainder being 
paid by the professional/inter-branch organisations th at proposed them and by the Member States 
concerned.  Interested professional organisati ons must send their proposals to the competent 
Authorities of the Member States following the publi cation of a call for proposals.  These then submit 
to the Commission the list of programmes they  have selected for final decision.   
 
Regulation (EC) N° 1071/2005 lists the themes  and products that can be covered by the 
promotion measures in the EU, and Regulation (EC) N° 1346/2005 is referred specifically to the third 
countries, both describing the procedures for presentin g proposals and for managing the programmes.   G/SCM/N/155/EEC 
Page 36  
 
  VI. INDUSTRY 
A. C
OMMUNITY FRAMEWORK PROGRAMMES IN THE FIELD OF RESEARCH  
 There are two framework programmes:   
  - the sixth framework programme of the European Community for research, 
technological development and demons tration activities (2002-2006), and 
  - the sixth framework programme of the European Atomic Energy Community 
(EURATOM) for research and training activities (2002-2006).   
 
1. Policy objective and/or purpose of the programme
 
  Financial participation in Community r esearch and technological development (RTD) 
activities during the period 2003-2004 is provided through the two above-mentioned framework programmes.   
 
 The legal bases of these programmes are, resp ectively, Article 166 of the EU Treaty and 
Article 7 of the Treaty establishing the Eu ropean Atomic Energy Community.   
  The sixth framework programme of the Europ ean Community is aimed at strengthening the 
scientific and technological bases of Community industry, encouraging the development of its 
competitiveness and contributing to the implementa tion of the other Community policies under the 
Treaty.  These objectives and the activities to be undertaken are stated in the Treaty and further 
implemented through the Decision adopting this  framework programme (Decision N° 1513/2002/EC 
of 27 June 2002
4).   
 
 The framework programme of th e European Atomic Energy Comm unity has two main parts:  
nuclear fission and controlled thermonuclear fusi on.  The objectives and activities to be undertaken 
are set out in the Decision adopting this framewo rk programme (2002/668/Euratom of 3 June 20025).   
  The activities under the two framework programmes relate to fundamental  research, industrial 
research or pre-competitive development.  Fina ncing of product development is excluded.   
 
 The arrangements for implementing the two framework programmes are essentially the same and are therefore described together in the following paragraph.    2. Form of subsidy
 
 
 The framework programmes are implemented through specific programmes, which are the 
subject of Council decisions.6   
  Community support to RTD activities is provided in the form of financing ("grants" within 
the meaning of Article 25.3 of the WTO Agreem ent on Subsidies and Countervailing Measures) 
granted to projects following, as a general rule , an invitation for proposals and an evaluation 
procedure with independent experts and selection procedure.     Research projects are carried out primarily by  participants established within the Community. 
Legal entities established in a country that has signed an association agreement (associated state) with 
                                                     
 
4 OJ L 232, 29/8/2002, p. 1.   
5 OJ L 232, 29/8/2002, p. 34.   
6 All these are published in the OJ L 294 of 29/10/2002.    G/SCM/N/155/EEC 
 Page 37 
 
 
  the Community may participate in a project and receive Community funding from the sixth 
framework programme on the same grounds as those established in Member States.  Legal entities 
established in countries targeted by the intern ational cooperation activities of the framework 
programme may participate and receive funding un der certain sixth framework programme research 
projects.  Legal entities established in countries that have signed a scientific and technical cooperation 
agreement with the Community may participate in sixth framework programme research projects.  
Legal entities established in any ot her third country may participate in sixth framework programme 
research projects.  Funding for legal entities in the latter two categories may be provided if provision 
is made for this or if it is essential for carrying out the project.   
 
 Research projects must include the participa tion of at least three independent legal entities 
established in three different Member States or associ ated states of which two must be Member States 
or associated candidate countries.  Partnerships us ually include universities, research organisations 
and industry.    
 The European Commission is responsible fo r the implementation of the programmes.  
Contracts concluded with the Commission govern the rights and obligations of each partner (see 
http://europa.eu.int/comm/research/ fp6/model-contract/index_en.html
). 
 3. Amount and duration of subsidy
 
 
2003-2004 Total amounts 
(in millions of Euros) 
Sixth framework programme of the European Community for research, technological development and demonstration activities 8267 
Sixth framework programme of the European 
Atomic Energy Community (EURATOM) 636 
Total 8903 
 
4. Incidence on trade  
  The sixth RTD framework programmes have no di rect impact on trade.  As a general rule, 
further work is always necessary for the results of a RTD project to lead to a commercially exploitable 
process or product.   
 
 Furthermore, access to the results can be shared among partners and information may be made more widely available under certain conditions, whic h serves the public interest.  One of the main 
benefits lies in establishing links among research co mmunity partners, within Europe but also with 
non-EU countries.    
 The economic impact of industrially oriented programmes can be assessed only several years 
after the completion of the projects because further i nvestment is required after the end of the research 
projects to develop any competitive applications.    B. R
ESEARCH ON COAL AND STEEL  
The Treaty establishing the European Coal and Steel Community (ECSC) expired on 
23 July 2002.  The remaining assets at the expiry of the ECSC were transferred to the European 
Community and a common Research Fund for Coal and Steel (RFCS) was created, dedicated to research in the coal and steel sectors.  The activ ities carried out under this Fund are exclusively 
financed by the yearly returns generated by these assets.   G/SCM/N/155/EEC 
Page 38  
 
  The Research Programme of the Research Fund for Coal and Steel was established by the 
Council Decisions 2003/76/EC, 2003/77/EC and 2003/ 78/EC of 1 February 2003, published in the 
Official Journal of 5 February 2003 (see OJ L 29/22, OJ L 29/25, OJ L 29/28).    
The programme is closely co-ordinated with othe r activities, carried out either in the Member 
States or existing Community research programm es, such as the Framework Programme of the 
European Community for research, technological deve lopment and demonstration activities.  In order 
to increase the impact of this programme, the Eu ropean Commission will encourage and promote co-
ordination, complementarities and synergy betw een the different research programmes and support 
the exchange of information between projects fi nanced under this programme and those financed 
under the Research Framework Programme.   
 
The programme related documents and the inform ation package are available on CORDIS at:  
http://www.cordis.lu/coal-steel-rtd/home.html
.   
 
For coal and steel, the Community contributes financially in the following ways:  through 
research, pilot and demonstration (RTD) pr ojects, accompanying measures and support and 
preparatory actions.    
(1) Research, Pilot and Demonstration:    
Research projects are intended to cover investig ative or experimental work with the aim of 
acquiring further knowledge.  The financial contributi on of the Community is up to 60 per cent of the 
allowable costs. 
 Pilot projects address the construction, operati on and development of an installation or a 
significant part of an installation on an appropriate scale.  These installations should have a sufficient 
scale for use.  They should allow the investigati on of potential for putting th eoretical or laboratory 
results either into practice or to increase the relia bility of the technical and economic data needed to 
progress to the demonstration stage, and in certain c ases to the industrial and/or commercial stage.  
The financial contribution of the Community is up to 40 per cent of the allowable costs.   
 
Demonstration project: aim at constructing and/or  operating an industrial-scale installation or 
a significant part of an industrial-scale installation.  Such projects aim to bring together all the technical and economic data in order to proceed with  the industrial and/or commercial exploitation of 
the technology at minimum risk.  The financial cont ribution of the Community is up to 40 per cent of 
the allowable costs.   
 
 (2) Accompanying measures are designed to complement and/or co-ordinate research 
activities related to this programme.     (3) Support measures:  this includes the disse mination of research results, the promotion 
of the use of knowledge gained and the support of training and mobility of researchers.   
 
 It is worth noting that the results of all RFCS funded research projects are made public and can be acquired against a small fee by any organi sation or individual, as provided for under Article 4 
of annex III of the model contract.  This allows  for a wide and non discriminatory dissemination of 
the research results.    G/SCM/N/155/EEC 
 Page 39 
 
 
   Total EC support provided to coal and steel  projects in the years 2003 and 2004 are:   
 
Year Coal 2003 Steel 2003 Coal 2004 Steel 2004 
Support in Million 
of € 16,132 43,676 15,266 43,610 
 
C. AID TO THE COAL INDUSTRY  
Aid to the coal industry within the European Union during the period 2003-2004 has been 
governed Council Regulation 1407/2002.    
1. Council Regulation 1407/2002 of 23 July 2002 on State aid to the coal industry
7 
With the expiry of the ECSC Treaty on 23 Ju ly 2002, all secondary legislation under the 
ECSC Treaty also automatically expired.  This included Commission Decision 3632/93/ECSC of 28 December 1993.  As from 24 July 2002, the sector s previously covered by the ECSC Treaty have 
been subject to the rules of the EC Treaty as well as the procedural rules and other secondary 
legislation derived from the EC Treaty.   
  Having regard to the EC Treaty, in particul ar Article 87(3)(e) thereof, Council Regulation 
(EC) No 1407/2002 of 23 July 2002 was established as the new legal framework for state aid to the 
Community coal industry.  In addition, the provisi ons of Article 88 EC Treaty and Council Regulation 
(EC) No 659/1999 also apply.   
 
 According to Council Regulation 1407/2002, di fferent categories of aid can be considered 
compatible with the common market:    
Aid
 Conditions  
  
 Aid for the reduction of activity  (Article 4): - closure plan, with a deadline of 
31 December 2007;   
 - aid may not exceed the difference between 
production costs and revenue;   
  
 Aid for accessing coal reserves  (Article 5):  
 Two categories are foreseen:    
 -  Aid for initial investment: - operating plan to ensure economic viability; 
- not more than 30 per cent of the total costs; 
 -  Current production aid: - part of a plan for accessing coal reserves; 
- aid granted to production units which afford 
the best economic prospects.   
   Aid to cover exceptional costs
 (Article 7): - costs arising from rationalisation and 
restructuring. 
 In addition, the following rules apply fo r all the categories of aid foreseen:   
 - The overall amount of aid to the coal industry granted shall follow a downward trend so as to 
result in a significant reduction.   
 - Aid may not cause lower prices than t hose for coal from third countries.   
                                                     
 
7 OJ L 205 of 2 August 2002, p. 1.   G/SCM/N/155/EEC 
Page 40  
 
  - Aid may not cause distortion of competition.   
- Member States have, on duly justified grounds , until June 2004 to notify the Commission of 
the individual identities of production units formi ng part of a closure plan.  For the countries 
which joined the European Union on 1 May 2004, this deadline was set at August 2004.   
 
- Member States shall notify the Commission of the amount and full information about the 
calculation of the aid actually paid during a coal year not later than six month after the end of that year.   
 - The Commission takes a decision in accordance with the rules of procedure laid down in 
Regulation (EC) No 659/1999 and in the light of the plans submitted.   
  
State aid authorized 2003 – 2004 (in millions €)
 
 
ECU/EUR million 2003 2004 
Germany 
-  operating aid 
-  aid for the reduction of activity -  other  
2,570.0 
56,483 
770  
2 045.3 
413.9 557.4 
Spain 
-  operating aid 
-  aid for the reduction of activity -  other not yet approved not yet approved 
France 
-  operating aid 
-  aid for the reduction of activity -  other  
169 
84,500 
746  
0 
86,6 
769,3 
United Kingdom 
-  operating aid 
-  aid for the reduction of activity -  other  
0 
0 
21,7  
0 
0 
29,1 
Poland 
-  operating aid 
-  aid for the reduction of activity 
-  other n/a not yet approved 
Czech Republic 
-  operating aid 
-  aid for the reduction of activity 
-  other n/a not yet approved 
Hungary 
-  operating aid 
-  aid for the reduction of activity 
-  other n/a not yet approved 
Slovak Republic 
-  operating aid 
-  aid for the reduction of activity 
-  other n/a not yet approved 
EU TOTAL 
-  operating aid 
-  aid for the reduction of activity 
-  other not yet known not yet known 
Aid in € per tonne for operating aid 
and aid for the reduction of activity n/a not yet known 
  G/SCM/N/155/EEC 
 Page 41 
 
 
  Coal production and imports in the Community (EUR-15):  2000-2004  
(in million tonnes)  
 
Year Million tonnes 
2000 203.2 
2001 196.5 
2002 191.4 
2003 (est.) 184.9 
2004 n/a 
 
 
VII. OTHER PROGRAMMES 
A. SME  AND ENTREPRENEURSHIP PROGRAMME  
1. Title of the programme  
 
 Multiannual programme for enterprise and entrepre neurship, and in particular for small and 
medium-sized enterprises (SMEs) (2001-2005).    2. Period covered by the notification
 
  1 January 2003 – 31 December 2004.   
 
3. Policy objective and/or purpose of the programme
 
  The programme holds the following five objectives:    
 1 enhancing the growth and compe titiveness of business in a knowledge-based 
internationalised economy;   
 2 promoting entrepreneurship;   
 3 simplifying and improving the administra tive and regulatory framework for business 
so that research, innovation and business creation in particular can flourish;   
 4 improving the financial environment for business, especially SMEs;   
 5 giving business easier access to Co mmunity support services, programmes and 
networks and improving the coor dination of these facilities.   
  With these objectives the MAP is also supportin g the implementation of the European Charter 
for Small Enterprises.   
 
4. Background and authority for the programme
 
  Council Decision 2000/819/EC of 20 December 2000.    
5. Form of assistance granted
 
  The objectives of the programme are pursued via a series of activities that fall under one of three headings:     The Financial Instruments :  these are schemes, managed by the European Investment Fund, 
that are specifically targeted at improving the financial environment for businesses, especially SMEs, 
by bridging those gaps that financial markets would otherwise normally leave open:   G/SCM/N/155/EEC 
Page 42  
 
   Start-up Scheme of the European Technology Facility (ETF)
.  It promotes growth and 
employment throughout the European Union by investing in funds providing risk capital to Smaller businesses.   
 
 SME Guarantee Facility
.  It is designed to increase the ava ilability of and facilitate access to 
debt finance for small companies with  job creation potential in Europe. 
 
 Seed Capital Action .  It is a facility designed to stimul ate the supply of capital for the creation 
of innovative new businesses with growth and job creation potential, through support (long-
term recruitment of additional investment ma nagers) for seed funds, incubators or similar 
organisation in which the EIF participates.   
  The Euro Info Centres Network :  Euro Info Centres represent an interface between 
European institutions and local actors.  Their task is to inform, advise and assist SMEs in all Europe-
related areas while taking into account the great va riety of enterprises concerned, so that, either 
directly or indirectly, they can make matters simpler and more efficient for SMEs.   
  Policy Development :  the Commission, in close coordina tion with Member States, analyses 
and studies how to ameliorate the overall environmen t that enterprises have to operate in.  This 
category include activities such as Best projects  for the identification and the exchange of best 
practices;  data collection and analysis;  grants , networks and other proj ects;  Publication and 
information dissemination.   
 6. To whom and how the assistance is provided
 
  Public, private or semi-public bodies, mainly  in response to public calls for expression of 
interest/calls for proposals.   
 7. Total expenditure under the programme
 
  The overall budget foreseen is 450 million EUR over 5 years.    
8. Duration of the programme
 
  1 January 2001 – 31 December 2005.    9. Trade effects
 
 
 Despite the fact that some actions are aimed at promoting access to new markets, the number of SMEs capable of internationalising their activities is nevertheless small.  Consequently, the impact 
on trade may be considered minimal.   
 
B. JEV
 PROGRAMME  
1. Title of the programme  
  The Joint European Venture (JEV) Programme.    2. Period covered by the notification
 
 
 1 January 2003 – 31 December 2004.    G/SCM/N/155/EEC 
 Page 43 
 
 
  3. Policy Objective and/or purpose of the programme  
  To provide financial contributions to sma ll and medium-sized enterprises (SMEs) for the 
setting-up of new transnational joint vent ures within the European Union.   
 
4. Background and authority for the programme
 
  Commission Decision 97/761/EC of 5 November 1997 (OJ L 310/28, 13.11.1997), Council Decision 98/347/EC of 19 May 1998 (OJ L 155/43, 29.5.1998) and Council Decision 2000/819/EC of 
20 December 2000 (OJ L 333/84, 29.12.2000).   
 
 This programme was closed by Decision 593/2004/ EC of the European Parliament and of the 
Council of 21 July 2004 amending Council Decision 2000/819/EC (OJ L268/3, 16.8.2004), fixing the 
closure date for applications as 29.12.2004.    
5. Form of assistance granted - Grants from Community budget for
 
  The Community contribution was intended to cover a part of the expenses incurred in the conception and setting-up of transnational joint vent ures.  The maximum contribution per project was 
EUR 100,000 covering:    
 Up to 50 per cent of the eligible expenses, with a maximum of EUR 50,000;   
 Up to 10 per cent of the total amount of investment made in fixed assets.   
 6. To whom and how the assistance is provided
 
 
 Direct support to SMEs within the Europ ean Union.  Applications were made to 
intermediaries, which were banks or other appropriate financial in stitutions.  The intermediaries 
(selected by a call for expressions of interest) were entrusted with the evalua tion of the applications 
and, in the event of a favourable opinion, made recommendations to the Commission.    7. Total expenditure under the programme
 
 
 The total amount committed for the progr amme was EUR 57 million but only about 
EUR 3 million was disbursed for joint venture projects by end of 2004.    8. Duration of the programme
 
 
 1997 - 2004.    9. Trade effects
 
  The JEV aid was never contingent on the sub sequent joint venture's export intentions or 
capabilities.  The information on the joint venture partners' past or future exports was neither 
requested nor relevant in determining the amount of support for the preparatory works or for the 
investment.  Furthermore, from the start of the programme in 1997 until 31 December 2004 only 
163 Joint Venture projects have received support fr om the JEV programme, due to which the impact 
of this programme on trade has been negligible.   G/SCM/N/155/EEC 
Page 44  
 
  C. FIFG 
1. Title of the programme
 
  Financial Instrument of Fisheries Guidance (FIF G) – structural measures in the fisheries and 
aquaculture sector.   
 
2. Period covered by the notification
 
  2000 - 2006.    
3. Policy and/or programme objectives
 
  Community structural measures in the fisher ies and aquaculture sector and the processing and 
marketing of its products.    
 The objectives of the instruments are the following:   
  - To contribute to achieving a sustainable balance between fishery resources and their 
exploitation.   
  - To strengthen the competitiveness of structures and the development of economically 
viable enterprises in the sector.   
  - To improve market supply and the value a dded to fisheries and aquaculture products.   
  - To contribute to the revitalization of areas that depend on fisheries.   
 
4. Legal authority
 
  Articles 32, 33, 158, 159 and 161 of the EC  Treaty, Regulation (EC).1260/99, Regulation 
(EC) 2792/99, Regulation (EC) 2369/2002.    
5. Type of aid
 
  Aid for the restructuring of fishing fleets, aquaculture, processing and marketing circuits, port 
facilities and socio-economic measures.    
6. To whom and how the subsidy is provided
 
  Co-financing principle and principle of regionally diversified action.   
  Ship-owners, enterprises, producer organi zations, public and private bodies, professional 
organizations, cooperatives, fishermen.   
 
7. Total budget of the programme
 
  Objective 1 Regions:  2000-2006:  EUR 2.6 billion (0.403 billion EUR budgeted in 2000).   
 Other Regions:  2000-2006:  EUR 1.1 billion.   
 
 2003 (all regions):  578 MEUR, 2004 (all regions):  629 MEUR.    G/SCM/N/155/EEC 
 Page 45 
 
 
  8. Duration of the programme  
  2000 - 2006.    9. Trade effects
 
 
 The Community has a shortfall in fishery and aquaculture products and is a major importer of 
these products from non-Community countries.  The structural aid has only a very small influence on this situation.    
D. C
OMMON ORGANISATION OF MARKETS IN FISHERY AND AQUACULTURE PRODUCTS  
1. Title of the measure  
  Common Organisation of the Market in Fishery and Aquaculture Products.    
2. Period covered by the notification
 
  2001 - 2002.    3. Policy objectives and/or programme objectives
 
 
 The objectives of this instrument are the following:   
  - To stabilize to promote sustainable fishing and optimum use of fish products.    - To stabilize the market.    - To ensure a regular supply of high-quality products.   
 - To guarantee reasonable consumer prices.   
 - To support fishermen's incomes.    4. Legal authority
 
  Articles 32, 33 and 34 of the EC Treaty, Regulation (EC) No. 104/2000.   
 
5. Intervention mechanisms
 
  Financial compensation, carry-over aid, auto nomous withdrawal and carry-over, private 
storage aid, compensatory payment for tuna supplied to industry.   
 
6. To whom and how the subsidy is provided
 
  Mechanisms implemented by producers' organizations.     Beneficiaries:  fishermen belonging to such organizations.   
 
7. Total budget of the programme
 
  (EU-15) 2003:  14,5 MEUR budgeted, 12,6 MEUR effectively disbursed.    (EU-25) 2004:  33,0 MEUR budgeted, 14.05 MEUR effectively disbursed.   
 
8. Duration of the programme
 
  Fishing years.    G/SCM/N/155/EEC 
Page 46  
 
  9. Effects on trade
 
  None in so far as the Common Organization of Markets aims at regularizing prices and not at artificially raising their level.  The amounts paid  under the programme represent less than 0,002 per 
cent of the value of landed fish in the EC (EU-15).   
  
   G/SCM/N/155/EEC
 Page 47ANNEX 1 
 
 
Overview of the implementation of direct payments  
under the CAP in Member States 
  
MS Start 
SPS Regions Model 
SPS / SAPS Decoupling 
of dairy 
payment What sectors remain coupled Implementation of the second wave of the CAP- 
reform (tobacco, cotton, olive oil and hops) and the reform of the sugar sector 
2005 Zone Nord :  Flanders 
+ Brussels SPS historical 2006 -  suckler cow premium 100% 
-  slaughter premium calves 100% -  seeds (some species) 100% -  tobacco coefficient for decoupling:  1 
Belgium 
2005 Zone Sud :  Wallonia SPS historical 2006 -  suckler cow premium 100% 
-  seeds (some species) 100% -  tobacco coefficient for decoupling:  1 
Bulgaria   SAPS   - 
Czech 
Republic   SAPS   -  separate sugar payments 
Denmark 2005 One region SPS static 
hybrid 2005 -  special male bovine premium 75% 
-  sheep and goat premium 50% - 
Germany 2005 Bundesländer (Berlin 
included in 
Brandenburg, 
Bremen in Lower 
Saxony and 
Hamburg in 
Schleswig-Holstein) SPS dynamic 
hybrid 
moving to a 
flat rate model 2005  -  hops payments 25% coupled 
-  tobacco coefficient for decoupling:  0.4 
Estonia   SAPS   - 
Greece 2006 - SPS historical 2007  -  seeds  
-  Article 69 application:    =  10% of the ceiling for arable crops,  =  10% of the ceiling for the beef sector, 
 =  5% of the ceiling for the sheep and goat 
 sector.   -  Article 69 application:   
 =  2% of the ceiling for tobacco,  =  4% of the ceiling for olive oil,  =10% of the ceiling for sugar 
-  2% deduction in the olive oil sector for the funding of 
working programmes established by producer 
organisations (Art 110 (i) of 1782/2003 and Art. 8 of 
Reg. 865/2003) 
-  Annex VII point H and I:   
  -  tobacco and olive oil co efficient for decoupling:  1  
  G/SCM/N/155/EEC 
Page 48  
MS Start 
SPS Regions Model 
SPS / SAPS Decoupling 
of dairy 
payment What sectors remain coupled Implementation of the second wave of the CAP- 
reform (tobacco, cotton, olive oil and hops) and the reform of the sugar sector 
Spain 2006 - SPS historical 2006 -  seeds 100% 
-  arable crops 25% 
-  sheep and goat premiums 50% 
-  suckler cow premium 100% -  slaughter premium calves 100% -  slaughter premium bovine adults 40% -  Article 69 application: 
 =  7% of the ceiling for the bovine sector, 
 =  10% of the ceiling for dairy payments.   -  outermost regions 100% -  tobacco coefficient for decoupling:  0.4 
-  olive oil coefficient for decoupling:  0.936 
-  Article 69 application:   
 =  5% of the ceiling for the tobacco sector,  =  10% of the ceiling for the cotton sector,  =  10% of the ceiling for sugar.   
France 2006 - SPS historical 2006 -  arable crops 25% 
-  sheep and goat premium 50% -  suckler cow premium 100% -  slaughter premium calves 100% -  slaughter premium bovine adults 40% 
-  seeds (some species) 
-  outermost regions 100% -  10% deduction in the olive oil sector for the funding of 
working programmes established by producer 
organisations (Art 110 (i) of 1782/2003 and Art. 8 of 
Reg. 865/2003) 
-  hops payments 25% coupled 
-  Annex VII point H and I:   
 -  olive oil coefficient for decoupling:  1  -  tobacco coefficient for decoupling:  0.4 
Ireland 2005 - SPS historical 2005 None - 
Italy 2005 - SPS historical 2006 -  seeds 100% 
-  Article 69 for quality production:   
 =  8% of the ceiling for the arable sector,  =  7% of the ceiling for the bovine sector, 
 =  5% of the ceiling for the sheep and goat 
 sector -  Article 69 application:   
 =  8% of the ceiling for sugar  
-  5% deduction in the olive oil sector for the funding of 
working programmes established by producer 
organisations (Art 110 (i) of 1782/2003 and Art. 8 of 
Reg. 865/2003) 
-  Annex VII point H and I: 
 - olive oil coefficient for decoupling is increased to 1  - tobacco coefficient for decoupling:  0.4 
 - for the region Puglia, the decoupling coefficient for  
 tobacco is 100% 
Cyprus   SAPS   - 
Latvia   SAPS   -  separate sugar payments 
Lithuania   SAPS   -  separate sugar payments 
Luxemburg 2005 One region SPS static 
hybrid 2005 None - 
Hungary   SAPS   -  separate sugar payments 
  
   G/SCM/N/155/EEC
 Page 49 
MS Start 
SPS Regions Model 
SPS / SAPS Decoupling 
of dairy 
payment What sectors remain coupled Implementation of the second wave of the CAP- 
reform (tobacco, cotton, olive oil and hops) and the reform of the sugar sector 
Malta 2007 One region SPS regional 
model  None  - 
Netherlands 2006 - SPS historical 2007 -  slaughter premium calves 100% 
-  slaughter premium bovine adults 100% 
-  seeds for fibre flax 100% - 
Austria 2005 - SPS historical 2007 -  suckler cow premium 100% 
-  slaughter premium calves 100% 
-  slaughter premium bovine adults 40% -  tobacco 100% decoupled 
-  hops payment 25% coupled 
Poland   SAPS   -  separate sugar payments 
Portugal 2005 - SPS historical 2007 -  suckler cow premium 100% 
-  slaughter premium calves 100% 
-  slaughter premium bovine adults 40% 
-  sheep and goat premium 50% 
-  seeds 100% 
-  outermost regions 100% 
-  Article 69 application:   
 =  1% (arable crops, rice, bovine and  
 ovine sectors) -  Article 69 application: 
 =  10% of the ceiling for the olive oil sector,  =  10% of the ceiling for sugar -  tobacco coefficient for decoupling 0,5 
-  olive oil coefficient for decoupling:  1 
Slovenia 2007 One region SPS regional 
model  -  special male bovine premium 75% 
-  sheep and goat premium 50% 
-  Article 69 application:   
 =  10 % of the bovine sector -  hops payment 25% 
Slovakia   SAPS   -  separate sugar payments 
Finland 2006 Three regions (based 
on reference yield) SPS dynamic 
hybrid 
moving to a 
flat rate model 2006 -  sheep and goat premium 50% 
-  special male bovine premium 75% -  Article 69 application: 
 =  2.1% of the ceiling for arable crops, 
 =  10% of the ceiling for the bovine sector -  seeds (timothy seed) - 
Romania   SAPS   - 
Sweden 2005 Five regions 
(based on reference 
yield) SPS static 
hybrid 2005 -  special male bovine premium 74.55% 
-  Article 69 application:   
 =  0.45% of total ceiling - 
United 
Kingdom 2005 England normal SPS dynamic 
hybrid moving to flat 
rate payment 2005 None - 
  
  G/SCM/N/155/EEC 
Page 50  
MS Start 
SPS Regions Model 
SPS / SAPS Decoupling 
of dairy 
payment What sectors remain coupled Implementation of the second wave of the CAP- 
reform (tobacco, cotton, olive oil and hops) and the reform of the sugar sector 
2005 England - moorland SPS dynamic 
hybrid moving to flat 
rate payment  None - 
2005 England - SDA 
minus moorland SPS dynamic 
hybrid 
moving to flat rate payment  None - 
2005 Scotland SPS historical  -  Article 69 application: 
 =  10% of the ceiling for the bovine sector - 
2005 Wales SPS historical  None - United 
Kingdom 
(Cont'd) 
2005 Northern Ireland SPS static 
hybrid  None - 
 
Abbreviations: SPS  Single Payment Scheme 
  SAPS Single Area Payment Scheme 
 
  
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